Richard Johnson/National PostClick here to see an enlarged map of the Strait of Hormuz region.

DUBAI — Iran will keep the vital Strait of Hormuz shipping lane open as long as the waterway served its interests, a military commander was on Monday quoted as saying.

Iranian politicians and officials have often said that Iran could block the strait — the neck of the Gulf through which 40% of the world’s seaborne oil exports passes — in response to sanctions or military action.

Such a move would risk a military response from the United States and Foreign Minister Ali Akbar Salehi told Reuters in July that Iran was unlikely to follow through on the threat unless its own vessels were denied use of the strait.

“Iran’s goal is for everyone in the world to use the Strait of Hormuz but as long as it does not harm Iran’s interests and in that case our reaction would definitely be different,” IRNA news agency quoted senior Revolutionary Guards commander Masoud Jazayeri as telling Iran’s Arabic-language Al Alam television.

HMCS Regina sailed Tuesday from B.C. to replace HMCS Charlottetown in the Arabian Gulf at a time when the U.S. has been moving additional naval forces into the volatile region to prevent any attempt by the Iranian military to block the Strait of Hormuz.

The buildup of U.S. forces near Iran was reported in the New York Times Tuesday. The move is part of a game of high-stakes brinksmanship involving Iran, the U.S. and Israel over Iran’s nuclear program.

In a related action, the U.S. and its allies have put in place an almost total embargo on Iranian oil exports to try to force Tehran to make concessions.

The Charlottetown has made several transits of the Strait of Hormuz in the past few weeks, for shore visits in the Persian Gulf and not for operational reasons, a senior military officer told Postmedia News Tuesday.

National Post GraphicsClick to enlarge this map of the Strait of Hormuz

“Those transits were for R and R,” the officer said. But to get to friendly ports on the western side of the Gulf, warships must pass within a few kilometres of Iran in the channel, running a gauntlet of Iranian anti-ship missiles and small, high-speed craft operated by Iran’s Revolution Guard Corps. Warships that transit from the Indian Ocean into the Gulf are also routinely buzzed by Iranian surveillance aircraft.

The Charlottetown has been at the leading edge of what the Harper government described last year as a move to establish, for the first time, a semi-permanent Canadian naval presence in some of the most dangerous waters in the world.

The frigate, which is based in Halifax, has a crew of 250 sailors as well as a small air detachment flying Sea King helicopters.

The Charlottetown participated in the naval bombardment and blockade of Libya early last year before returning to Canada for a few months. In its absence, HMCS Vancouver carried out similar duties before the Charlottetown returned.

The Regina is not expected to return to B.C. until December or January. It is likely to be replaced by an east-coast frigate at that time.

“We are probably going to continue that cycle for some time,” the officer said.

The Charlottetown was moved from the Mediterranean through the Suez Canal to the Arabian Sea in late April to conduct what Defence Minister Peter MacKay described at the time as “security and anti-terrorism operations.”

Since then the frigate has been patrolling as part of Combined Task Force 150, a multinational operation usually involving about a dozen or more warships. It is led from a U.S. naval base in Bahrain and is responsible for a large swath of water including the Gulf of Aden, the Gulf of Oman, the Arabian Sea, the Red Sea and the Indian Ocean. It is one of three such task forces operating in the western Indian Ocean.

Having the Charlottetown and other Canadian warships near Iran fits with the Harper government’s strong opposition to Iran’s suspected plan to acquire nuclear weapons.

MacKay reportedly told Israel’s top general, at a meeting last year, that “a threat to Israel is a threat to Canada.”

Postmedia News

]]>http://news.nationalpost.com/2012/07/03/strait-of-hormuz-canada/feed/11stdHMCSClick to enlarge this map of the Strait of HormuzIran warns its Strait of Hormuz ships will soon be armed with missileshttp://news.nationalpost.com/2012/06/29/iran-warns-its-strait-of-hormuz-ships-will-soon-be-armed-with-missiles/
http://news.nationalpost.com/2012/06/29/iran-warns-its-strait-of-hormuz-ships-will-soon-be-armed-with-missiles/#commentsFri, 29 Jun 2012 15:05:45 +0000http://news.nationalpost.com/?p=189292

Richard Johnson/National PostClick here to see an enlarged map of the Strait of Hormuz region.

DUBAI — Iran expects to equip its ships in the Strait of Hormuz soon with shorter-range missiles, a Revolutionary Guards commander was quoted as saying, in the latest apparent warning to the West not to attack it over its disputed nuclear program.

The Islamic Republic has threatened to shut the Strait, the conduit out of the Gulf for 40% of the world’s seaborne oil trade, if Western sanctions aimed at curbing its nuclear works block its own crude exports.

The European Union plans to impose a total embargo on Iranian oil from Sunday and has told Tehran that more punitive steps could follow if it keeps defying UN demands for limits nuclear activity that could be of use in developing bombs.

“We have already equipped our vessels with missiles with a range of 220 km (136 miles) and we hope to introduce missiles with a range of over 300 km (186 miles) soon,” Ali Fadavi said, the semi-official Mehr news agency reported on Friday.

“We could target from our shores all areas in the Persian Gulf region, the Strait of Hormuz and the Sea of Oman.”

Iran is about 225 km (140 miles) at its nearest point from Bahrain, where the U.S. Fifth Fleet is based, and about 1,000 km (625 miles) from its arch-enemy Israel. Tehran’s longest-range missile, the Sajjil-2, can fly up to 2,400 km (1,500 miles).

Iran’s military and security establishment often asserts its strength in the region, particularly in the Strait of Hormuz, the world’s most important oil transit channel carrying supplies from Gulf producers to the West.

But it has increasingly flexed its military muscle in the face of U.S. and Israeli warnings that last-resort military action against Iran cannot be ruled out if diplomacy and sanctions fail to resolve the nuclear dispute.

In January, the Islamic Republic said it had successfully test-fired what it called two long-range missiles.

Earlier this month, the Iranian navy announced plans to build more warships and increase its presence in international waters such as the Gulf of Aden and northern Indian Ocean.

Iran denies Western suspicions that it is trying to develop technology and material required to produce nuclear weapons, saying it needs the know-how solely to generate electricity.

Tehran has said it would retaliate for any attack with missile strikes against Israel and U.S. assets in the Gulf.

A third round of nuclear talks between world powers and Iran on June 18-19 aimed ultimately at curbing Iranian nuclear activity in exchange for sanctions relief failed to ease the stalemate. With that process seemingly close to collapse, Israel renewed veiled threats to hit Iranian nuclear installations that it considers a mortal threat.

]]>http://news.nationalpost.com/2012/06/29/iran-warns-its-strait-of-hormuz-ships-will-soon-be-armed-with-missiles/feed/17stdIranian military personnel stand on a submarine during a naval parade on the last day of the Velayat-90 war game in the Sea of Oman near the Strait of Hormuz in southern Iran January 3, 2012.Strait of Hormuz (Click to enlarge)Iran has no plans to shut Strait of Hormuz despite threats, Kuwait assureshttp://news.nationalpost.com/2012/03/20/iran-has-no-plans-to-shut-strait-of-hormuz-despite-threats-kuwait-assures/
http://news.nationalpost.com/2012/03/20/iran-has-no-plans-to-shut-strait-of-hormuz-despite-threats-kuwait-assures/#commentsTue, 20 Mar 2012 14:45:46 +0000http://news.nationalpost.com/?p=153550

Richard Johnson/National PostClick here to see an enlarged map of the Strait of Hormuz region.

Iran has assured Kuwait it will not try to close the vital Strait of Hormuz shipping route, Kuwait’s ruler said in remarks carried by state-run news agency KUNA on Tuesday.

Sheikh Sabah al-Ahmad al-Sabah said Kuwait nevertheless had been working for “a long time” on building up an oil stocks outside the Gulf to ensure steady supplies to customers.

After threats by Iran that it could shut the most important oil transit channel in the world, if Western governments stop it from selling crude, Kuwait’s emir and other Gulf leaders have sought assurances that Tehran will not follow through with the threats.

“(We) have contacted officials in Iran to ensure that no action is taken to close the Strait of Hormuz,” according an English version of his remarks to Japanese press distributed by Kuwait state news agency KUNA.

“We have received assurances from Iran that it will not take this step,” the emir said during a visit to Japan, one of the Gulf oil exporter’s biggest customers.

“For a long time, Kuwait has been working on providing a stockpile of oil through its global companies outside the Gulf region to ensure constant supply,” he said.

Several Iranian officials have said Iran should block the waterway in response to sanctions targeting its nuclear program. Western governments suspect Iran is trying to make atomic weapons. Tehran denies this.

OPEC member Kuwait, which is producing around 3 million barrels a day, ships all its oil exports through Hormuz.

SANCTIONS TAKING THEIR TOLL

Redmond, Washington, businessman Fred Harrington, who exports to Iran under a humanitarian license from the U.S. Treasury Department, says he is owed close to $3.8 million by Iranian companies who cannot pay him because of the latest U.S. and European Union sanctions.

He is not alone.

U.S. firms from major drug makers like Merck & Co. to mom-and-pop outfits like Harrington’s American Pulp & Paper Corp. are finding it hard to get paid even for medicines and other humanitarian exports explicitly allowed by the U.S. Treasury, according to officials, sanctions lawyers and the companies.

“Everything from aspirin to multivitamins — you name it — it’s all jammed up,” said Cari Stinebower, an international trade lawyer with Crowell & Moring, a Washington, D.C.-based law firm, and a former counsel for the Treasury Department’s Office of Foreign Assets Control (OFAC).

The payments gridlock is a testament to the effectiveness of the latest round of financial sanctions, which aim to force Iran to curb its nuclear program and which have made the Iranian banking sector even more radioactive for major global banks.

But they also undercut the long-standing U.S. argument that its sanctions are not meant to squeeze the Iranian people but rather the Islamic republic’s leaders and their suspected pursuit of nuclear weapons.

“I am not against punishing Iran for being a rogue country but the United States, or the Europeans, when they start imposing sanctions, then they must consider, also their own companies,” Harrington said.

Harrington, an Iranian American who changed his name from Farhad Fouroohi, had to lay off three people in February because of the payments delays, cutting his staff from seven to four.

“[Merck] has experienced a challenging situation in 2012 in terms of securing payments for goods shipped,” said Merck spokeswoman Kelley Dougherty, adding that the company was open to ideas that would facilitate humanitarian exports to Iran.

Pfizer Inc, the world’s largest pharmaceuticals maker whose flagship products include the cholesterol-lowering drug Lipitor, acknowledged challenges in getting paid for Iranian sales, saying it would work through them. Both Merck and Pfizer declined to provide details.

But for companies such as Pfizer or Merck, exports to Iran are a tiny fraction of their worldwide business.

If ordinary Iranians ultimately suffer shortages of drugs and medical devices, the Iranian government may use it to score public relations points with their own people against the West, much as former Iraqi dictator Saddam Hussein did in Iraq.

“They need to defend their position to their own population. They need to continue to create this image of an international community that is implacably aligned against the interests of a defenseless Iran,” said Suzanne Maloney, a senior fellow at the Brookings Institution’s Saban Center for Middle East Policy.

“This kind of imagery would play into that and it’ll have a certain resonance among Iranians who have a long experience with sanctions, resent the impact of sanctions on ordinary citizens and believe … the government is well able to insulate itself.”

“ELECTRONIC CURTAIN”

U.S. President Barack Obama, in a holiday message Tuesday to the Iranian people, said that the two nations despite their tensions share a “common humanity,” as he pressed for greater freedom for those living in Iran.

“There is no reason for the United States and Iran to be divided from one another,” Obama said in a statement to Iranians on Nowruz, the Persian New Year, adding that “the Iranian people are denied the basic freedom to access the information that they want.”

“To the people of Iran, this holiday comes at a time of continued tension between our two countries,” Obama said.

“But as people gather with their families, do good deeds, and welcome a new season, we are also reminded of the common humanity that we share.”

But the message offered fresh criticism of the Iran government on human rights issues, saying Tehran has created an “electronic curtain” for Iranians.

“The Iranian government jams satellite signals to shut down television and radio broadcasts,” Obama said.

“It censors the Internet to control what the Iranian people can see and say. The regime monitors computers and cell phones for the sole purpose of protecting its own power. And in recent weeks, Internet restrictions have become so severe that Iranians cannot communicate freely with their loved ones within Iran, or beyond its borders. Technologies that should empower citizens are being used to repress them.”

Because of the actions, Obama said “an electronic curtain has fallen around Iran — a barrier that stops the free flow of information and ideas into the country, and denies the rest of the world the benefit of interacting with the Iranian people, who have so much to offer.”

“I want the Iranian people to know that America seeks a dialogue to hear your views and understand your aspirations,” he added.

“That’s why we set up a Virtual Embassy, so you can see for yourselves what the United States is saying and doing. We’re using Farsi on Facebook, Twitter, and Google Plus.”

Even as Washington has imposed sanctions on the Iranian government, Obama said his administration “is issuing new guidelines to make it easier for American businesses to provide software and services into Iran that will make it easier for the Iranian people to use the Internet.”

Millions of Iranians — along with people of other Persian-influenced nations such as Afghanistan — celebrate Nowruz with the start of spring, which is meant to represent renewal.

]]>http://news.nationalpost.com/2012/03/20/iran-has-no-plans-to-shut-strait-of-hormuz-despite-threats-kuwait-assures/feed/0stdThis January 19, 2012 image provided by the US Navy, shows the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) transiting the Arabian Sea. The Lincoln has passed through the Strait of Hormuz and is now in the Gulf, the Pentagon said January 23, 2012 after Tehran threatened to close the strategic shipping route.Strait of Hormuz (Click to enlarge)Sanctions already squeezing Iran oil exports … even before they go into effecthttp://news.nationalpost.com/2012/03/01/sanctions-already-squeezing-iran-oil-exports-even-before-they-go-into-effect/
http://news.nationalpost.com/2012/03/01/sanctions-already-squeezing-iran-oil-exports-even-before-they-go-into-effect/#commentsThu, 01 Mar 2012 21:20:32 +0000http://news.nationalpost.com/?p=146737

By Timothy Gardner

WASHINGTON — Western trade sanctions against Iran are strangling its oil exports even before they go into effect, a U.S. advisory body has found, amid warnings that any shortages will only push up crude prices and strain a weak global economy.

With crude prices trading around 10-month highs and limited spare production capacity worldwide, the United States may offer Iran’s biggest customers waivers from the oil sanctions, which take effect June 28.

Iran is the world’s fifth largest oil exporter and the second-biggest producer in OPEC after Saudi Arabia.

Related

It’s biggest customers, including China, Japan and India have become tangled up in U.S.-led sanctions aimed at curbing Iran’s nuclear ambitions, but which have also revived fears of a global recession.

High crude prices present a major challenge for politicians seeking re-election, including for U.S. President Barack Obama, who may face a backlash from voters paying a U.S. gasoline price that is climbing towards record levels of $4 a gallon.

Obama, however, can grant waivers if doing so would be deemed in the nation’s interest.

“With oil inventories and spare OPEC production capacity running low, consumers don’t have much buffer against additional disruptions in supply,” said Trevor Houser, a partner at Rhodium Group and a former State Department adviser.

“That means the needle the administration has to thread to pressure Iran without raising oil prices has gotten even smaller.”

The Energy Information Administration (EIA), an independent arm of the U.S. Department of Energy, said on Wednesday that Western insurers were declining to cover the trade risk on some Iranian oil shipments.

On June 28, Washington will slap sanctions on foreign banks facilitating Iran’s oil trade, making doing business with Tehran all the more difficult.

The needle the administration has to thread to pressure Iran without raising oil prices has gotten even smaller

On Wednesday, news emerged that the U.S. government recently forced Dubai-based Noor Islamic Bank to stop channeling Iranian oil money, cutting off another of Iran’s links to the international banking system.

The world’s biggest electronic bank clearing system, SWIFT, is also preparing to block Iran’s central bank from using its network to transfer funds.

In a sign of Iran’s difficulties, traders said Tehran was trying to sell about 200,000 tonnes of crude oil from a supertanker floating off Singapore.

They also said a vessel heading towards China was carrying more oil than the usual term-contract supplies.

Asian nations buy almost half of Iran’s oil exports, but the U.S. sanctions have forced them to either reduce the amount they buy or look for alternative suppliers.

Iran is India’s second-biggest oil supplier after Saudi Arabia, and New Delhi revealed on Wednesday it had sought up to 80,000 barrels per day extra oil from Iraq in 2012/13, days after placing a similar request with top exporter Saudi Arabia.

The EIA report, which looked at global oil output and prices over the last two months since Obama signed the sanctions into law, said oil supplies have become increasingly tight, largely due to the looming embargo and string of production outages in Yemen, Syria, South Sudan, and the North Sea.

The report said global spare crude production capacity was “quite modest” by historical standards, and estimated a global supply gap of 1.6 million barrels per day if Iranian oil was completely taken out of the picture.

Iran has threatened to retaliate against the sanctions by closing the Strait of Hormuz, a waterway which carries nearly 20 percent of the global oil trade.

FEARS OF ISRAEL STRIKE

Richard Johnson/National PostClick here to see an enlarged map of the Strait of Hormuz region.

Iran insists its nuclear program is for peaceful purposes but the West’s mistrust runs deep. Western diplomats say the U.N. nuclear watchdog was concerned over “activities” that might be taking place at Iran’s Parchin military facility.

It was unclear what kind of activities the International Atomic Energy Agency (IAEA) suspected. Diplomats said the agency was monitoring the site via satellite images.

With Israel hinting it could launch a pre-emptive strike on an Iranian nuclear facility, a pro-Iranian militant group, Hezbollah, warned such an attack would set the Middle East ablaze and possibly drag the United States into the conflict.

“America knows that if there is a war on Iran, this means that the whole region will be set alight, with no limit to the fires,” Hezbollah deputy Sheikh Naim Qassem told Reuters.

The United States and Israel have not ruled out a military strike on Iran to halt its nuclear program.

Rising petrol prices are a hot issue ahead of the U.S. presidential elections in November. Republicans are trying to tap voter anger to criticize Obama and his Democratic party’s energy policy.

Fortunately for oil consumers, Saudi Arabia, home to the world’s biggest spare oil cushion, has also boosted production in the last two months.

The kingdom produced an average of 9.7 million bpd over the last two months, the EIA said, about 100,000 bpd less than figures in a Reuters survey on Wednesday. The EIA figure is up about 600,000 bpd from the same period last year.

In Syria, the Assad regime continues to rain artillery on rebel positions in the city of Homs, killing journalists and innocent civilians alike. Iran’s mullahs are set to execute a Canadian citizen for the crime of operating a web site they don’t like. The new Libyan regime is torturing Gaddafi loyalists. And Egypt’s rulers are prosecuting NGO leaders on trumped-up charges. And so next week, Canadian left-wing activists will congregate in Toronto to express their hatred of … you guessed it: Israel.

The events of March 5-9 will take place as part of the 8th annual Israel Apartheid Week (IAW), and will feature presentations such as “Cutting the Ties to Israeli Apartheid: Cultural and Academic Boycott,” and “Rhymes Of Resistance And The Sounds Of Existence — with poets Remi Kanazi, Red Slam and Chand-nee.” The IAW website is full of the usual rhetoric about Israel’s “criminal” actions. There is not a word of acknowledgement about how utterly ridiculous it is to run a week-long event vilifying Israel when right next door in Syria, the government has just exterminated more Arabs than were killed in both Intifidas, the 2008 Gaza conflict, and the 2006 Lebanon war combined.

The timing of IAW this year truly does represent something of a farce. The eyes of the entire world are focused on Syria and the Strait of Hormuz. Even West Bank Palestinians themselves now seem more concerned with building up their economy than with grand international gestures aimed at the Jewish state. And in the “occupied” Golan Heights, Druze Muslims have been stirring — not against Israel, but against the Assad regime that many once looked to for “liberation.” In the streets of Cairo, Sana’a and Tunis, no one is talking about Israel — only about when they will get the democracy they were promised. Only among cultish, single-minded anti-Israel activists has the news of the Arab Spring failed to circulate.

The word “cultish” is used here advisedly — because even some veteran anti-Israel activists are getting tired of the false mantras that circulate at IAW events. This includes no less an anti-Zionist than Norman Finkelstein (who has called Israel a “vandal state” that “relentlessly and brutally and inhumanly keeps these vicious, murderous wars”). Speaking to an interviewer earlier this month, he attacked the animating philosophy behind IAW — the movement for boycotts, divestment and sanctions against Israel (BDS) — as a “cult,” and an unsuccessful one at that.

National Post editorial writers have attended BDS events here in Toronto, and they all contain the same rousing assurances that the BDS movement will bring Israel to its knees. The self-consciously enforced spirit of viva la revolución solidarity that permeates these rallies reminds one of communist rallies in the days before the fall of the Berlin Wall. Year after year, we hear the same clichés about how the BDS movement is on the cusp of victory. Yet the Israeli economy continues to prosper, and the only groups that have fallen into line with the boycott call are scattered NGOs and low-tier universities. “All [the BDS] claims about ‘victories’ [against Israel]: These 10 fingers more than suffice to count their victories,” Mr. Finkelstein said this month. “It’s a cult. The guru says: ‘We have all these victories,’ and everyone nods their head.”

Of greater concern to Mr. Finkelstein, a former university professor and the author of many controversial books, is the sheer dishonesty that permeates the BDS movement.

“We have to be honest: They [BDS activists] don’t want Israel. They think they’re being clever. They call it their three tiers. ‘We want to end of the occupation,’ ‘We want the right of return [for Palestinian refugees],’ ‘And we want equal rights for Arab citizens.’ But they know the result of implementing all three is — what? You and I both know: There’s no Israel. [If you ask them about it, they say] ‘Oh we’re agnostic about Israel.’ No. You’re not agnostic. You don’t want it [to exist].”

In fairness to the IAW activists who will be assembling on campuses in coming days, not all of them seek the outright destruction of Israel — though many certainly do. Some are merely naive undergraduates who truly do believe in two secure, peaceful states living side by side. Others are bored veterans of other activist movements, such as anti-racism and gay rights, looking to the Middle East to recapture the sense of moral purpose once provided by the (successful) fight against discrimination here in Canada.

But all of them should understand that IAW and BDS are not what they seem: As some of Israel’s own fiercest critics themselves now admit, these are dishonest cults meant to enlist ill-informed activists in a campaign to destroy the Jewish state.

National Postjkay@nationalpost.com

— Jonathan Kay is Managing Editor for Comment at the National Post, and a fellow of the Foundation for Defense of Democracies.

VIENNA/TEHRAN — The UN nuclear watchdog ended its latest mission to Iran after talks on Tehran’s suspected secret atomic weapons research failed, a setback likely to increase the risk of confrontation with the West.

France said Iran’s refusal to allow the inspectors to see a key military site used for suspected atomic weapons research was a “missed opportunity” that could undermine chances of reviving wider talks between Tehran and world powers.

In a defiant response, Supreme Leader Ayatollah Ali Khamenei said Iran’s nuclear policies would not change despite mounting international pressure against what the West says are Iran’s plans to obtain nuclear bombs.

“With God’s help, and without paying attention to propaganda, Iran’s nuclear course should continue firmly and seriously,” he said on state television. “Pressures, sanctions and assassinations will bear no fruit. No obstacles can stop Iran’s nuclear work.”

Possessing a nuclear bomb, he said, “constitutes a major sin,” he told a group of nuclear scientists.

As sanctions mount, ordinary Iranians are suffering from the effects of soaring prices and a collapsing currency. Several Iranian nuclear scientists have been killed over the past two years in bomb attacks that Tehran has blamed on its arch-adversary Israel.

Richard Johnson/National PostClick here to see an enlarged map of the Strait of Hormuz region.

In response, Iran has issued a series of statements asserting its right to self-defense and threatening to block the Strait of Hormuz, a vital oil tanker route.

The collapse of the nuclear talks came as Iran seems increasingly isolated, with some experts seeing the Islamic republic’s mounting defiance in response to sanctions against its oil industry and financial institutions as evidence that it is in no mood to compromise with the West.

Elections on March 2 are expected to be won by supporters of Khamenei, an implacable enemy of the West.

The failure of the two-day visit by the International Atomic Energy Agency could now hamper any resumption of wider nuclear negotiations between Iran and six world powers as the sense grows that Tehran feels it is being backed into a corner.

In the view of some analysts, the Iranians may be trying to keep their opponents guessing as to their capabilities, a diplomatic strategy that has served them well in the past.

“But they may be overdoing the smoke and mirrors and as a result leaving themselves more vulnerable,” said professor Rosemary Hollis of London’s City University.

A team from the IAEA had hoped to inspect a site at Parchin, southeast of Tehran, where the agency believes there is a facility to test explosives.

“During both the first and second round of discussions, the agency team requested access to the military site at Parchin. Iran did not grant permission for this visit to take place,” the Vienna-based IAEA said in a statement.

“It is disappointing that Iran did not accept our request to visit Parchin. We engaged in a constructive spirit, but no agreement was reached,” said IAEA Director General Yukiya Amano.

A Western official added: “We think that if Iran has nothing to hide why do they behave in that way?”

“It is another missed opportunity,” French Deputy Foreign Ministry spokesman Romain Nadal said. “This refusal to cooperate adds to the recent statements made by Iranian officials welcoming the progress of their nuclear activities.”

Iranian analyst Mohammad Marandi said providing the West with any more access than necessary to nuclear sites would be a sign of weakness.

“Under the current conditions it is not in Iran’s interest to cooperate more than is necessary because the West is waging a war against the Iranian nation,” he told Reuters.

Earlier, Iran’s envoy to the IAEA, Ali Asghar Soltanieh, said Tehran expected to hold more talks with the UN agency, but Amano’s spokeswoman said no further meetings were planned.

Iran rejects accusations that its nuclear programme is a covert bid to develop a nuclear weapons capability, saying it is seeking to produce only electricity.

But its refusal to curb sensitive atomic activities which can have both civilian and military purposes, and its record of years of nuclear secrecy has drawn increasingly tough UN and separate U.S. and European measures.

The United States and Israel have not ruled out using force against Iran if they conclude that diplomacy and sanctions will not stop it from developing a nuclear bomb.

“This was only to be expected, given Iran’s evasions,” a senior Israeli official said.

The failure of the IAEA’s mission may increase the chances of a strike by Israel on Iran, some analysts believe.

But this would be “catastrophic for the region and for the whole system of international relations,” Russian Deputy Foreign Minister Gennady Gatilov said.

STILL TIME FOR DIPLOMACY?

An IAEA report in November suggested Iran had pursued military nuclear technology and helped precipitate the latest sanctions by the European Union and United States.

One key finding was information that Iran had built a large containment chamber at Parchin to conduct high-explosives tests. The UN agency said there were “strong indicators of possible weapon development”.

The IAEA said intensive efforts had been made to reach agreement on a document “facilitating the clarification of unresolved issues” in connection with Iran’s nuclear programme.

“Unfortunately, agreement was not reached on this document,” it said in an unusually blunt statement on Wednesday.

The IAEA mission’s failure may reduce the chance of any resumption of wider nuclear negotiations between Iran and the six world powers — the United States, China, Russia, Britain, France and Germany.

The West last week expressed some optimism at the prospect of new talks, particularly after Iran sent a letter to EU foreign policy chief Catherine Ashton promising to bring “new initiatives”, without stating preconditions.

But the United States and its allies may be reluctant if they feel that the Islamic state is unlikely to engage in substantive discussions about its nuclear activities.

WAR?

Already talk of possible military action against Iran by Israel, with or without U.S. help, had been giving urgency to diplomatic attempts to lower tensions.

Russia, which along with China has been giving Iran diplomatic cover, warned against that prospect.

“The scenario of military action against Iran would be catastrophic for the region and possibly the whole system of international relations,” said Deputy Foreign Minister Gennady Gatilov.

He urged nations to wait for the IAEA’s official report before deciding to condemn Iran for failing to cooperate.

Iran has repeatedly said the sanctions will not deter it from its nuclear ambitions, and it has threatened to strike back at any military action, possibly by closing the strategic Strait of Hormuz.

This week, it deployed warplanes, missiles and radar facilities in exercises to boost the defences of its nuclear facilities.

Iran “does not seek war and has never started a war, but it will vigorously defend its national interests,” Defence Minister Ahmad Vahidi said.

Iran has also announced a halt to the limited amount of oil it exported to Britain and France in retaliation for an EU embargo on its oil due to come fully into effect in July.

On Tuesday, the government threatened to cut supplies to other EU nations if they did not stop their “hostile” policies.

A helicopter escort hovered above the vessel in a warning not to get any closer, and the grey boat, tiny compared to the massive U.S. aircraft carrier, eventually turned around.

The encounter involving U.S. and Iranian boats, common in recent weeks, underscores rising tensions in the Gulf region between rival powers since Tehran threatened to close the Hormuz Strait, the world’s most important oil shipping waterway, over Western moves to ban Iranian crude exports.

U.S. and Iranian warships shadow each other as they ply the Gulf in a standoff over Iran’s nuclear program the West fears is aimed at producing an atomic weapon. Many fear any incident could trigger a war.

“I watch it morning, noon and night. I take it [the threat to close Hormuz] very seriously. In fact it’s pretty much my life these days,” the commander of U.S. naval forces in the Gulf region, Vice Admiral Mark Fox, told a news conference in Bahrain ahead of the fleet’s voyage earlier this week.

The fleet, known as “Carrier Strike Group Nine” has been making forays through Hormuz despite the Iranian threats.

The 10-hour voyage through the waterway on Feb. 14 was the second time the fleet had been through Hormuz in two months. Passage is done on a need-only basis as the U.S. Navy tries to avoid “escalation of hostilities or miscalculations,” as a result of their crossing, U.S. officials say.

With four helicopters circling overhead and two destroyers leading, the carrier entered Hormuz while up in the watch tower, some seven Navy commanding officers, intelligence chiefs and legal experts were gathered in a small but busy control room.

They inspected the Gulf waters intently. The head of the fleet, Rear Admiral Troy Shoemaker, spotted two small boats, thought to be of smugglers, being battered by the high waves.

“It is going very well, relatively quiet. We have had a couple of surveillance aircraft, a helicopter and UAV [unmanned aerial vehicle] but nothing in the way of surface activity,” Shoemaker said, referring to activity from Iranian side.

The geography of the Strait, where a third of the world’s seaborne oil trade passes, is challenging for a fleet of this size.

The waterway is 34 km wide at its narrowest point, and as it sails through the Gulf, the aircraft carrier comes within range of the Iranian coastal missile defence system.

Over a month ago Iran warned another U.S. aircraft carrier, the USS John C. Stennis, not to return to the Gulf after it passed through the Strait. But that has not deterred the USS Abraham Lincoln.

“We routinely operate close to them while we operate in the Arabian Gulf,” Shoemaker said.

“They have ships that would come out and observe us as you would expect we would do in our territorial water back in the United States, so all those exchanges were very professional,” he added.

The Iranians make their presence felt every time U.S. forces cross the strait, by almost escorting the fleet either by air or using patrol boats. The U.S. in return reassesses the threat from Iran on regular basis by studying Iranian activity.

Military experts say the U.S. Navy’s Fifth Fleet patrolling the Gulf — which always has at least one giant super carrier accompanied by scores of jets and a fleet of frigates and destroyers — is overwhelmingly more powerful than Iran’s navy.

But it is the small boats that worry the U.S. Navy most. Vice Admiral Fox said last week that Iran had built up its naval forces in the Gulf and prepared boats that could be used in suicide attacks.

Iran is thought to have increased the number of small boats based in the strait and around its Gulf Islands, and some boats are capable of carrying cruise missiles and rockets.

Five thousand sailors live on board the 20-storey USS Abraham Lincoln. Fifteen to twenty thousand meals are prepared daily with 800 pounds of vegetables, 900 pounds of fruit and 620 pounds of hamburger consumed every day.

For many of the sailors, Iran’s threats were not always something they paid attention to. They often saw their mission in simpler terms.

“We want that oil to go where it needs to go in this world. We want people in this region to be able to get the products they can buy from Europe, from America, other regions of the world,” said Naval Aviator Matt Driskill, 33, who recently flew fighter planes over Libya and over Iraq in 2004.

The day after the passage, the mood on board the USS Abraham Lincoln is considerably more relaxed onboard.

Fighter aircraft that have been sitting on deck over the past 24 hours with their noses pointing towards Iran and readiness to launch within 15 minutes have now been stowed.

The admiral said the same preparations are taken every time the fleet passes a narrow canal. But he admitted that the fleet can be seen as show of force.

“Part of the reasons we exist is to be present around the world and be visible, even if itself the carrier, the planes and everything else on board is a show of force,” Shoemaker said.

If Iran attacks, the United States is ready to defend, Shoemaker said.

“It is certainly a possibility that they could take some actions to try and close the straits but we are prepared for that, we have the capabilities resonant in this force, in this strike group to respond if that happens.”

WASHINGTON — U.S. intelligence agencies predict Iran will respond if attacked but is unlikely to start a conflict, and they believe Israel has not taken a decision to strike Iranian nuclear sites, a top U.S. intelligence official said Thursday.

With those comments, Lieutenant-General Ronald Burgess, director of the Defence Intelligence Agency, answered two key questions surrounding escalating tensions with Iran after the United States increased sanctions over its nuclear program.

Lt.-Gen. Burgess also said despite the ratcheting up of sanctions on Iran, the country’s leaders are unlikely to abandon their suspected nuclear weapons program.

Iran responded to the new sanctions that target its central bank and oil exports by threatening to close a key oil shipping lane. There have also been concerns Israel might strike Iranian nuclear facilities and escalate tensions further.

The West suspects Iran’s nuclear program is aimed at developing weapons, while Tehran says it is peaceful.

“Iran can close the Strait of Hormuz at least temporarily, and may launch missiles against United States forces and our allies in the region if it is attacked,” Lt.-Gen. Burgess told a Senate armed services committee hearing.

Richard Johnson/National Post GraphicsClick to enlarge

“Iran could also attempt to employ terrorist surrogates worldwide. However, the agency assesses Iran is unlikely to initiate or intentionally provoke a conflict.”

Asked bluntly whether intelligence agencies believed Israel had made a decision to attack Iran, he replied, “To the best of our knowledge Israel has not decided to attack Iran.”

On the sanctions, the defence intelligence chief said Iran was nowhere near giving up its nuclear aspirations.

“Iran today has the technical, scientific and industrial capability to eventually produce nuclear weapons. While international pressure against Iran has increased, including through sanctions, we assess that Tehran is not close to agreeing to abandoning its nuclear program,” he said.

REUTERS/Jumana El HelouehThe Sterett Destroyer escorts the Nimitz-class aircraft carrier USS Abraham Lincoln during a transit through the Strait of Hormuz on Tuesday.

Iran proclaimed advances in nuclear know-how on Wednesday, including new centrifuges that can enrich uranium much faster, a move that may hasten a drift toward confrontation with the West over its nuclear program.

U.S. intelligence agencies assess Iran’s leaders have so far not decided to build a nuclear weapon.

“They are keeping themselves in a position to make that decision, but there are certain things they have not yet done and have not done for some time,” James Clapper, director of national intelligence, said at the same hearing without providing details.

AFP/Getty ImagesA handout picture released by Iranian President Mahmoud Ahmadinejad's official website shows him (2nd L) listening to an expert during a tour of Tehran's research reactor on February 15, 2012.

Mr. Clapper said U.S. and Israeli assessments generally are in agreement, and he was visiting Israel next week to discuss intelligence sharing.

The United States wants sanctions to pressure Iran into serious talks to curb its nuclear program.

While vowing no retreat from its atomic path, Tehran has also told world powers it wants to resume stalled talks quickly with “new initiatives” in hand.

]]>http://news.nationalpost.com/2012/02/17/iran-nuclear-weapons/feed/14stdPakistan's Prime Minister Yousuf Raza Gilani, right, and Iranian President Mahmoud Ahmadinejad arrive for a meeting at the Prime Minister House in Islamabad on Thursday. Iran proclaimed advances in nuclear know-how Wednesday, including new centrifuges that can enrich uranium much faster.Click to enlargeThe Sterett Destroyer escorts the Nimitz-class aircraft carrier USS Abraham Lincoln during a transit through the Strait of Hormuz on Tuesday.A handout picture released by Iranian President Mahmoud Ahmadinejad's official website shows him (2nd L) listening to an expert during a tour of Tehran's research reactor on February 15, 2012.Iran denies cutting off oil exports to six EU countries, heralds nuclear advanceshttp://news.nationalpost.com/2012/02/15/iran-cuts-off-oil-exports-to-six-countries-heralds-nuclear-advances/
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Richard Johnson/National Post GraphicsClick to enlarge

By Parisa Hafezi

TEHRAN — Iran’s Oil Ministry denied state media reports on the Islamic state stopping its crude exports to six European countries on Wednesday.

“We deny this report … If such a decision is made, it will be announced by Iran’s Supreme National Security Council,” a spokesman for the ministry told Reuters.

Iran trumpeted advances in nuclear technology on Wednesday, citing new uranium enrichment centrifuges and domestically made reactor fuel, in a move abetting a drift towards confrontation with the West over its disputed atomic ambitions.

The announcement underlined Iranian determination to pursue a nuclear program its Islamic clerical rulers see as a pillar of power, protection and prestige despite Western sanctions that are inflicting increasing damage on Iran’s oil-based economy.

Iran has been resorting to barter to import basic staples as sanctions, imposed over its pursuit of nuclear activity seen in the West as geared to developing atomic bombs, have spread to block its oil exports and central bank financing of trade.

Tehran has for some years been developing and testing new generations of centrifuges to replace an outdated, breakdown-prone model. In January it said it had successfully manufactured and tested its own fuel rods for use in nuclear power plants.

The aim of its announcements on Wednesday was to show that international sanctions are failing to stop it making progress in nuclear know-how despite trade embargoes and to strengthen its hand in any renewed negotiations with six world powers.

“The fourth generation of domestically made centrifuges have a higher speed and production capacity … It will be unveiled on Wednesday,” state television said, without giving a source.

REUTERS/Raheb Homavandi/FIlesA boy holds a picture of Supreme Leader Ayatollah Ali Khamenei in front of a scale model of the U.S. RQ-170 unmanned spy plane during a ceremony to mark the 33rd anniversary of the Islamic Revolution, in Tehran's Azadi square February 11, 2012. Iran's President Mahmoud Ahmadinejad said on the anniversary of the revolution that the Islamic Republic would soon announce "very important" achievements in the nuclear field, state TV reported.

It was the latest display of Iran thumbing its nose at a series of UN resolutions demanding that it suspend uranium enrichment and open up to UN nuclear inspectors.

Last year, Iran installed two newer models for large scale testing at a research site near the central town of Natanz. But it remains unclear whether Tehran, subject to increasingly strict trade sanctions, has the means and components to make the more sophisticated machines in industrial quantity.

If Iran eventually succeeded in introducing modern centrifuges for production, it could significantly shorten the time needed to stockpile enriched uranium, which can generate electricity or, if refined much more, nuclear explosions.

Tehran has worked for several years to perfect faster, more reliable centrifuge machines than the 1970s-vintage P-1 model it now uses to refine uranium.

Western analysts were skeptical of the proclaimed advances.

“We have seen this before. We have seen these announcements and these grand unveilings and it turns out that there was less there than meets the eye. I suspect this is the same case,” said Shannon Kile at the Stockholm International Peace Research Institute (SIPRI).

NO CHANGE OF COURSE

The United States and Israel have not ruled out military action if diplomacy and sanctions are ultimately judged futile in reining in Tehran’s nuclear activity.

Iran has threatened retaliation for any attack or effective ban on its oil exports, suggesting it could seal off the main Gulf export shipping channel, the Strait of Hormuz, used by a third of the world’s crude oil tankers.

REUTERS/Jumana El HelouehAn F/A-18 fighter plane (bottom) prepares to launch on the flight deck of the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) during flight operations in the Gulf, ahead of a transit through the Strait of Hormuz, February 13, 2012.

A senior Iranian official said Iran would load domestically made nuclear fuel rods into its Tehran Research Reactor on Wednesday for the first time to keep it running.

“The first home-made nuclear fuel rods will be loaded in the Tehran Nuclear Research Reactor in the presence of the president,” Ali Baqeri, deputy head of Iran’s Supreme National Security Council, told ISNA.

The Tehran reactor produces radio-isotopes for use in medical treatments and agriculture.

Iran says it was forced to manufacture its own fuel for the Tehran reactor after failing to agree terms for a deal to obtain it from the West to replenish imported Argentinian stocks that will run out in the near future.

In 2010, Iran alarmed the West by starting to enrich uranium to a fissile purity of 20 percent for the stated purpose of conversion into special fuel for the Tehran reactor.

In boosting enrichment up from the 3.5% level suitable for powering civilian nuclear plants, Iran moved significantly closer to the 90% threshold suitable for the fissile core of a nuclear warhead.

“Another achievement to be unveiled today is the inauguration of a project of producing 20% enriched uranium at the Natanz facility, as well as producing 20 percent fuel plates,” state television said.

Analysts remained doubtful that Iran would be able to operate the research reactor with its own special fuel.

“As usual, the announcement surely is exaggerated.

Producing the fuel plates … is not so hard. But the plates have to be tested for a considerable period before they can be used safely in the reactor,” said Mark Fitzpatrick of London’s International Institute for Strategic Studies.

“If Iran is really running the reactor with untested fuel plates, then my advice to the residents surrounding the building would be to move somewhere else. It will he unsafe.”

Spent fuel can be reprocessed into plutonium, the alternative key ingredient in atomic bombs. But Western worries about Iran’s nuclear program have focused on its enrichment program, which has accumulated enough material for up to several bombs, in the view of nuclear proliferation experts.

Analysts say the fuel rod development itself will not put Iran any closer to producing nuclear weapons, but could be a way of telling Tehran’s adversaries that time is running out if they want to find a negotiated solution to the dispute.

The most recent talks between world powers and Iran failed in January 2011 because of Tehran’s unwillingness to discuss transparent limits on enrichment, as demanded by several U.N. Security Council resolutions passed since 2006.

But Iran said recently it is ready to hold fresh talks with no preconditions. “We will also a reply to the EU’s foreign policy chief [about nuclear talks] today,” Baqeri said.

An earlier version of this story reflected information from Iran’s English-language Press TV indicating Iran would be cutting off oil exports to six EU countries. The story has been adjusted to reflect Iran’s official denial of those reports.

]]>http://news.nationalpost.com/2012/02/15/iran-cuts-off-oil-exports-to-six-countries-heralds-nuclear-advances/feed/11stdA helicopter from the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) patrols the Arabian Gulf during a Strait of Hormuz transit, February 14, 2012.Click to enlargeA boy holds a picture of Supreme Leader Ayatollah Ali Khamenei in front of a scale model of the U.S. RQ-170 unmanned spy plane during a ceremony to mark the 33rd anniversary of the Islamic Revolution, in Tehran's Azadi square February 11, 2012. Iran's President Mahmoud Ahmadinejad said on the anniversary of the revolution that the Islamic Republic would soon announce "very important" achievements in the nuclear field, state TV reported.An F/A-18 fighter plane (bottom) prepares to launch on the flight deck of the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) during flight operations in the Gulf, ahead of a transit through the Strait of Hormuz, February 13, 2012.U.S. sends aircraft carrier through Strait of Hormuz, clarifies sanctions on Iranhttp://news.nationalpost.com/2012/02/14/u-s-clarifies-sanctions-on-iran-as-it-sends-aircraft-carrier-through-strait-of-hormuz-again/
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The Obama administration on Tuesday clarified how it would enforce recently passed Iran sanctions including how the United States would determine if another country has significantly reduced oil purchases from Iran. This came as one of the country’s aircraft carriers sailed through the Strait of Hormuz.

“We are working intensively to implement the (National Defense Authorization Act’s) financial sanctions as part of our broad-based efforts to stop Iran’s illicit nuclear activities,” David Cohen, U.S. Treasury under secretary for terrorism and financial intelligence, said in a statement.

Related

Secretary of State Hillary Clinton, in consultation with Treasury Secretary Timothy Geithner, Energy Secretary Steven Chu, and the Director of National Intelligence James Clapper will determine whether countries have reduced their purchases of Iran’s oil enough to avoid penalties, guidance from the Treasury Department said.

Richard Johnson/National Post GraphicsClick to enlarge

Clinton will consider the amount and percentage of reductions in purchases of Iranian oil and whether countries have ended contracts for future deliveries of Iranian petroleum, or taken other actions that demonstrate a commitment to reduce the purchases.

This came as a U.S. aircraft carrier strike group sailed through the Strait of Hormuz on Tuesday more than a month after Iran warned a different carrier — USS John C. Stennis — not to return to the Gulf as Iranian navy boats sailed by.

Iran has threatened to close the Strait of Hormuz, used for a third of the world’s seaborne oil trade, if Western moves to ban Iranian crude exports cripple its energy sector.

On Tuesday aircraft carrier USS Abraham Lincoln — part of the Bahrain-based U.S. Fifth Fleet — sailed through the strait of Hormuz with the Cape St George destroyer cruising behind.

REUTERS/Jumana El HelouehAn F/A-18 fighter plane (bottom) prepares to launch on the flight deck of the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) during flight operations in the Gulf, ahead of a transit through the Strait of Hormuz, February 13, 2012.

“If you listen to the [Iranian] rhetoric … you might think that there are some tensions,” Admiral Troy Shoemaker, commander of the carrier strike group nine, told Reuters.

“We obviously pay attention to that as we go through but I think we are conducting the transit as part of our normal business … Our intention is to keep it professional and routine.”

The commander of U.S. naval forces in the Gulf region said on Sunday Iran had built up its naval forces in the Gulf and prepared boats that could be used in suicide attacks, but the U.S. Navy could prevent it from blocking the Strait of Hormuz.

Military experts say the U.S. Navy’s Fifth Fleet patrolling the Gulf — which always has at least one giant supercarrier accompanied by scores of jets and a fleet of frigates and destroyers — is overwhelmingly more powerful than Iran’s navy.

REUTERS/Jumana El HelouehA propeller of an E-2C Hawkeye is seen as plane captains stand by to receive planes on the flight deck of the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72), during flight operations in the Gulf, ahead of a transit through the Strait of Hormuz, February 13, 2012.

Oil prices remain underpinned by tensions surrounding Iran’s dispute with the West over Tehran’s nuclear program and the accelerating turmoil in Syria.

Saudi Arabia has offered additional crude supplies to India, the Indian government said as its defense minister visited Riyadh to discuss defense cooperation and as Indian and other refiners consider alternatives as sanctions on Iran tighten.

The United States and Israel have not ruled out military action against Iran if diplomacy fails to resolve the long-running dispute over Iran’s nuclear program.

Iran says its nuclear program is entirely peaceful and rejects allegations that it is building atomic weapons. It has refused to stop uranium enrichment and has vowed to retaliate over oil sanctions imposed by Western countries and any military attack.

REUTERS/Jumana El HelouehREUTERS/Jumana El HelouehA helicopter from the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) hovers over an Iranian patrol ship during a transit through the Strait of Hormuz, February 14, 2012.

Suspicions about activities at Parchin, southeast of Tehran, date back at least to 2004 when a prominent nuclear expert said satellite images showed it may be a site for research and testing relevant for nuclear weapons.

United Nations inspectors were allowed into the site a year later but not to areas where the November report said an explosives chamber was built.

Amano is hoping the exchanges with the Iranians will lead to real progress in the new talks.

“On our part we will continue to be taking a constructive approach and I expect an equally constructive approach on their part,” he said at the event commemorating the 45th anniversary of a regional anti-nuclear proliferation treaty.

]]>http://news.nationalpost.com/2012/02/14/u-s-clarifies-sanctions-on-iran-as-it-sends-aircraft-carrier-through-strait-of-hormuz-again/feed/4stdA security patrolman keeps watch at the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) during a transit through the Strait of Hormuz, February 14, 2012Click to enlargeAn F/A-18 fighter plane (bottom) prepares to launch on the flight deck of the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) during flight operations in the Gulf, ahead of a transit through the Strait of Hormuz, February 13, 2012.A propeller of an E-2C Hawkeye is seen as plane captains stand by to receive planes on the flight deck of the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72), during flight operations in the Gulf, ahead of a transit through the Strait of Hormuz, February 13, 2012. A helicopter from the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) hovers over an Iranian patrol ship during a transit through the Strait of Hormuz, February 14, 2012. China looks to Saudi Arabia and Russia for oil in bid to squeeze out sanction plagued Iranhttp://news.nationalpost.com/2012/02/07/china-looks-to-saudi-arabia-and-russia-for-oil-in-bid-to-squeeze-out-sanction-plagued-iran/
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By Judy Hua and Alex Lawler

BEIJING/LONDON — China is scouring the world for alternative oil supplies to replace a fall in its imports from Iran, as it seeks to negotiate lower prices from Tehran, and has been drawing heavily on Saudi Arabia.

Industry sources told Reuters that Beijing had bought the bulk of an increase in crude oil supplies from top oil exporter Saudi Arabia in the last few months.

The world’s second-largest oil consumer is also importing more cargoes from West Africa, Russia and Australia to replace reduced supplies from Iran.

China is the top buyer of Iranian oil, taking around 20 percent of its total exports, but since January it has cut purchases by around 285,000 barrels per day (bpd), or just over half of the total daily amount it imported in 2011.

Saudi Arabian output reached 9.76 million barrels per day (bpd) in December, up 360,000 bpd from October, OPEC data show, and has remained near that level in January, according to a Reuters survey. Several sources in the oil industry said China has bought a good part of the extra oil.

“On average, Saudi exports went up by 200,000 barrels per day and this went to the East, overwhelmingly to China,” said one of the sources, a senior executive with the trading arm of a U.S. oil company.

A source familiar with the matter, who declined to be identified by name, also said the kingdom had been supplying about an extra 200,000 bpd to China since November.

Oil traders believe Unipec, the trading arm of China’s top refiner Sinopec Corp. (0386.HK), has been using a flexibility clause in deals, known as tolerance, to buy more oil under term contracts, especially as Saudi official selling prices in the past two months have been attractive.

“Under the current circumstances, it is necessary to use the tolerance to adjust lifting volumes,” a Chinese oil trader said.

Unipec declined to comment.

Official Chinese data also show an increase in crude oil imports from Saudi Arabia in the last few months, but on a smaller scale than the rise given by the industry sources.

China imported 1.12 million bpd of crude from Saudi Arabia in December, customs data show, down from 1.17 million bpd in November. That is still up from October’s 1.07 million bpd.

REUTERS/Morteza NikoubazlIranian consumers stock up on goods as they prepare for sanctions hitting the country.

“GAMBLING”

Industry sources were unsure if the trend towards higher supplies from Saudi and others would continue, once China finishes negotiations with Iran over term purchasing contracts.

Some traders suspect China’s increased buying of alternatives may be a ploy to bolster its bargaining position in the supply talks with Tehran. Iran is keen to secure customers as new EU sanctions banning its oil, designed to discourage the country’s nuclear program, add to U.S. measures.

Officials from the two countries were expected to hold talks as early as this week in Beijing.

“Unipec is gambling now,” said a Beijing-based oil trader. “If the Iranian side can compromise and reach a term deal, Unipec will get a large volume of crude at favorable prices, offsetting the premiums it paid to buy alternative oil over the past months.”

Those alternatives include Unipec’s purchase of five Russian ESPO cargoes, or 3.65 million barrels, for March loading at a premium of around $6.00 a barrel to Dubai quotes, traders said. Unipec also bought a cargo of Russian Urals crude, which will arrive in China around March.

“ESPO are all spot cargoes and are close to China. Buying ESPO is practical and easy to handle,” a trader said.

As well as crude, Unipec has bought four shipments of Australian North West Shelf (NWS) condensate and Bayu Undan condensate from the Timor Sea for March to fill in for lower Iranian supplies.

A Reuters survey of oil flows from West Africa on Monday suggested Asia’s imports of crude from the region are at a record high.

Even so, China still needs Iranian oil and even Saudi Arabia and the rest of the Organization of the Petroleum Exporting Countries do not have the capacity to replace it.

With production believed to be around 9.75 million bpd in January, Saudi Arabia holds about 2.75 million bpd of idle production capacity to meet any sudden shortages – less than Iran’s output of 3.5 million bpd. Saudi holds the world’s only significant unused capacity.

“Iranian crude is important,” said an official at a Chinese state oil firm, who declined to be identified. “It is not very easy to replace all Iranian crude.”

VIENNA — Iran is believed to be expanding uranium enrichment activity deep inside a mountain, diplomatic sources said on Monday, a move likely to add to tension with Western powers that suspect Tehran is seeking nuclear weapons capability.

The move to increase sensitive nuclear work at the Fordow underground site near the Shi’ite Muslim holy city of Qom, even if expected, underlines the Islamic state’s defiance in the face of intensifying Western pressure to curb such activity.

Iran last month confirmed it had begun refining uranium to a fissile concentration of 20 percent at Fordow, shifting its highest-grade enrichment from an above-ground location to better protect it against any strikes by Israel or the United States.

Washington, which has not ruled out military action against Iran if diplomacy fails to resolve the long-running nuclear dispute, on Jan. 9 denounced the start-up of the Fordow plant as a further escalation of Iran’s “ongoing violations” of U.N. resolutions.

At that time, diplomats said Iran was operating at Fordow two so-called cascades, each of 174 centrifuges – machines that spin at supersonic speed to increase the ratio of the fissile isotope. More centrifuges were being installed, they said.

Enriched uranium can have both civilian and military uses.

One Vienna-based diplomat said two more cascades, like the first pair connected with each other to make the process more efficient, had now also been deployed to enrich uranium.

“The second set of cascades is operational … my understanding is they are both operational and (have) no problems,” the diplomat said.

Another diplomat accredited to the IAEA also painted a picture of expanding activity at Fordow, without giving details.

Neither Iran nor the International Atomic Energy Agency (IAEA), the Vienna-based U.N. agency that regularly inspects Iranian nuclear sites including Fordow, was immediately available for comment.

Iran said last year that it would transfer its highest-grade uranium refinement work to Fordow from its main enrichment plant at Natanz, and sharply boost capacity.

The decision to move work which the U.N. Security Council has called on Iran to suspend to an underground facility could further complicate diplomatic efforts to resolve the standoff peacefully.

AFP/Getty ImagesIranian supreme leader Ayatollah Ali Khamenei waving next to a portrait of Iran's late founder of Islamic Republic, Ayatollah Ruhollah Khomeini during Friday prayers sermon at Tehran University on February 3, 2012

SHORTENING TIMELINE

The United States and its allies say Iran is trying to develop the means to make atomic bombs, but Tehran insists its nuclear programme is aimed at generating electricity and isotopes for medical treatment.

President Barack Obama tightened sanctions on Iran another notch, the White House said on Monday, targeting its central bank and giving U.S. banks new powers to freeze assets linked to the government.

Iran two years ago started refining uranium to a fissile concentration of 20 percent at Natanz – far more than the 3.5 percent level usually required to power nuclear energy plants.

Tehran says it will use 20 percent-enriched uranium to convert into fuel for a research reactor making isotopes to treat cancer patients, but Western officials say they doubt that the country has the technical capability to do that.

In addition, they say, Fordow’s capacity – a maximum of 3,000 centrifuges – is too small to produce the fuel needed for nuclear power plants, but ideal for yielding smaller amounts of high-enriched product typical of a nuclear weapons programme.

Nuclear bombs require uranium enriched to 90 percent, but Western experts say much of the effort required to get there is already achieved once it reaches 20 percent purity, shortening the time needed for any nuclear weapons “break-out”.

They give different estimates of how quickly Iran could assemble a nuclear weapon – ranging from as little as six months to a year or more.

Western officials believe Iran has not yet decided whether it will indeed “weaponise” enrichment, but rather is seeking now solely to establish the industrial and scientific capacity to do so if needed for military and security contingencies.

Iran disclosed the existence of Fordow to the IAEA only in September 2009 after learning that Western intelligence agencies had detected it.

Ron Sachs-Pool/Getty ImagesU.S. President Barack Obama.

OBAMA TIGHTENS SANCTIONS

President Barack Obama tightened sanctions on Iran another notch, the White House said on Monday, targeting its central bank and giving U.S. banks new powers to freeze assets linked to the government.

Obama’s move, in an executive order he signed Sunday, was the latest action in an escalating campaign to target the Central Bank of Iran, and was intended to close loopholes in existing sanctions that Tehran has exploited.

In a letter to Congress, Obama said Iranian banks were hiding transactions to undercut the financial sanctions the United States and other powers have imposed in response to Iran’s nuclear program.

“I have determined that additional sanctions are warranted, particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks to conceal transactions of sanctioned parties,” Obama said in the letter.

He said the expanded powers – including for foreign branches of American banks – were necessary because of “deficiencies in Iran’s anti-money laundering regime” and “the continuing and unacceptable risk posed to the international financial system by Iran’s activities.”

Previously, U.S. banks were required to reject, rather than block and freeze, Iranian transactions. Obama’s executive order requires American institutions to seize Iranian state assets they encounter instead of just turning them back.

The total value of Iranian assets that would be affected by Obama’s new order was not immediately clear.

Obama has been tightening sanctions on Iran to reduce the government’s access to capital and oil revenues, seeking to draw the Islamic Republic back to the negotiating table to discuss a diplomatic resolution of its nuclear standoff.

Tehran says its nuclear program is meant to develop energy, not weapons.

But its recent shift of uranium enrichment to a mountain bunker and refusal to negotiate guarantees that the program is peaceful have raised fears about Iran’s ambitions and also stoked concerns about Gulf oil supplies.

Obama, who is up for re-election in November, has been criticized on the campaign trail for not being firm enough with Iran. Mitt Romney, the front-runner in the Republican race to oppose him on November 6, has accused the Democrat of relying on a “pretty please” approach to nuclear diplomacy.

The expanded financial sanctions announced on Monday add to sweeping measures Obama signed into law in late December which target Iran’s central bank and foreign institutions doing business with it.

“These actions underscore the administration’s resolve to hold the Iranian regime accountable for its failure to meet its international obligations,” the U.S. Treasury Department said in a statement.

President Barack Obama said on Sunday there were important risks to consider before any military strike against Iran and made clear he does not want to see more conflict in the oil-producing Gulf region.

In a television interview, Obama also said he did not believe Tehran had the “intentions or capabilities” to attack the United States, playing down the threats from Tehran and saying he wanted a diplomatic end to the nuclear standoff.

“Any kind of additional military activity inside the Gulf is disruptive and has a big effect on us. It could have a big effect on oil prices. We’ve still got troops in Afghanistan, which borders Iran. And so our preferred solution here is diplomatic,” Obama said.

His comments echoed concerns expressed by earlier by Iran’s neighbor Turkey that an attack on Iran would be disastrous.

Obama, who is up for re-election in November, has ended the U.S. war in Iraq and is winding down combat in Afghanistan amid growing public discontent about American war spending at a time when the economy remains shaky.

He said Israel had not yet decided what to do in response to the escalating tension but was “rightly” concerned about Tehran’s plans.

“My number one priority continues to be the security of the United States, but also the security of Israel, and we are going to make sure that we work in lockstep as we proceed to try to solve this, hopefully diplomatically,” he told NBC.

Iranian leaders have responded sharply to speculation that Israel could bomb Iran within months to stop it from assembling nuclear weapons, threatening to retaliate against any country that launches an attack against the Islamic Republic.

Iran says its nuclear program is meant to produce energy, not weapons.

But its recent shift of uranium enrichment to a mountain bunker – possibly impervious to conventional bombing – and refusal to negotiate peaceful guarantees for the program or open up to U.N. inspectors have raised fears about Iran’s ambitions as well as concerns about Gulf oil supplies.

REUTERS/Morteza NikoubazlIranian consumers stock up on goods as they prepare for sanctions hitting the country.

KNOCK OUT BLOW?

Tightening international sanctions against Iran look set to shrink its economy, push up inflation and further erode its currency, but they may fail to deliver a knock-out blow that forces Tehran to compromise on its nuclear ambitions.

Few areas of Iran’s economy now remain untouched by the sanctions. Because of payments difficulties, Iranian ships have in recent days stopped loading imports of Ukrainian grain. The United Arab Emirates has told its banks to stop financing Iran’s trade with Dubai. Iranians are finding it more difficult to obtain hard currency to travel abroad.

But the history of sanctions against other countries, and the strengths of Iran’s diverse and relatively self-reliant economy, suggest that as long as Tehran can find buyers for a large proportion of its oil, it will be able to limp along.

The pain will be felt throughout the country and could increase discontent with the government, but if President Mahmoud Ahmadinejad can cope with that political threat, there may be no overriding economic reason for him to back down.

“Iran can still scrape by,” said Gary Hufbauer, a fellow at the Peterson Institute for International Economics in the United States and a former U.S. Treasury official who has written extensively about the history of sanctions.

He ranks the measures against Iran – taken to stop what the West sees as Tehran’s nuclear ambitions – as among the toughest international sanctions of the past 50 years, but not as harsh as those once imposed on Iraq, North Korea and Cuba – countries which defied economic pressure.

]]>http://news.nationalpost.com/2012/02/06/iran-believed-to-be-expanding-uranium-enrichment-activity-deep-inside-a-secret-mountain-bunker/feed/9stdIranian 200-kilometre (120-mile) range Qader (Ghader) ground-to-sea missile is launched on the last day of navy war games near the Strait of Hormuz in southern Iran on January 2, 2012.Ayatollah Ali KhameneiU.S. President Barack Obama.Iranian consumers stock up on goodsIran ‘will blink’ if sanctions hit rapidly, so war probably won’t be needed: Israeli Ministerhttp://news.nationalpost.com/2012/02/03/iran-will-blink-if-sanctions-hit-rapidly-so-war-probably-wont-be-needed-israeli-minister/
http://news.nationalpost.com/2012/02/03/iran-will-blink-if-sanctions-hit-rapidly-so-war-probably-wont-be-needed-israeli-minister/#commentsFri, 03 Feb 2012 20:20:18 +0000http://news.nationalpost.com/?p=137043

By William Maclean, Fredrik Dahl and Mark Hosenball

Iran “will blink” if sanctions aimed at deterring it from building a nuclear bomb are imposed rapidly, meaning outside powers may never need to decide on possible armed action, an Israeli minister said on Friday.

Speaking to Reuters on the sidelines of a conference in Germany, Israeli Deputy Foreign Minister Danny Ayalon added that the key point of international concern should be the amount of enriched uranium Iran has managed to bury at a deep site at Fordow, its best sheltered nuclear site south of Tehran.

Ayalon was responding to a U.S. newspaper report that Defense Secretary Leon Panetta believed Israel was likely to bomb Iran within months to stop it building a nuclear bomb.

He added: “I don’t want to get into specifics because I don’t think we may necessarily reach that fork in the road of taking such a decision by all of us in the international community, if indeed sanctions will be imposed now, and the Iranians will stop completely their illegal activities now, then we may not even need to discuss such issues.”

The Washington Post reported on Thursday that Panetta was concerned about the increased likelihood Israel would launch an attack over the next few months. CNN said it confirmed the report, citing a senior Obama administration official, who declined to be identified.

Israel, widely believed to possess the Middle East’s only nuclear arsenal, views Iran’s uranium enrichment projects as a major threat and has not ruled out the use of military force to prevent Tehran from acquiring nuclear weapons.

Iran says its nuclear program is solely for peaceful purposes.

Washington and the European Union imposed tighter sanctions on Iran in recent weeks in a drive to force Tehran to provide more information on its nuclear program.

CRUNCH TIME

Richard Johnson/National Post graphicsCLICK TO ENLARGE

Iran has said repeatedly it could close the vital Strait of Hormuz shipping lane if sanctions succeed in preventing it from exporting crude, a move Washington said it would not tolerate.

Israel’s military intelligence chief said on Thursday he estimated that Iran could make four atomic bombs by further enriching uranium it had already stockpiled, and could produce its first bomb within a year of deciding to build one.

In Munich, Ayalon said Israel and the United States “absolutely” agreed not only on the goal of stopping Iran getting the bomb but also on how to reach that goal.

He said there had been “very, very positive steps” in toughening curbs on Iran including EU sanctions, although some of these might only take affect gradually over some months.

“It is not enough yet in the sense that the lead time is a little bit too much, I believe the crunch should be now. It is a matter of weeks and months that can make a difference,” he said.

“We know that Iran is actually accelerating its nuclear activities maybe to pre-empt sanctions, so this is why now is the time to do it, so the Iranians will blink. The Iranian regime, as fanatic, as radical, as dangerous as it is, it’s not irrational when it comes to its own political survival.”

“Now the dilemma will all be theirs. They will have the dilemma to stop or bear the consequences.”

Asked if Israel’s key concern was the amount of enriched uranium Iran was transferring to a site at Fordow from less well sheltered installations, he replied: “Absolutely.”

Nuclear facilities at Fordow, about 160 km south of Tehran near the Iranian holy city of Qom, are believed by some experts to be about 80 meters underground.

Experts say this is probably at or beyond the maximum depth that even very big conventional bombs can reach. Some say the United States is the only country with any chance of damaging the Fordow chamber using just conventional air power.

The vulnerability to air attack of the chamber at Fordow, beneath a former missile base controlled by the elite Revolutionary Guards Corps, came into sharper focus on January 9 when the United Nations nuclear watchdog confirmed that Iran had started enriching uranium at the site.

The same day a State Department spokeswoman declared that if Iran was enriching uranium to 20 percent at Fordow this would be a “further escalation” of its pattern of violating its obligations under UN Security Council resolutions.

Ayalon said Israel saw “continued enrichment not just to 3.5 percent but also at 20 percent, which is clearly not for civil use but for military use.”

“We see them also trying to expedite hardening their installations so they will reach an immunity zone, where some action may not be as effective, and this is why the time is so much of the essence.”

Iran’s move to make uranium refined to a fissile purity of 20 percent — compared with 3.5% normally used to fuel power plants — has raised concern in Israel and the West as this moved it closer to weapons-grade material of 90%.

U.S. CONCERNS

ATTA KENARE/AFP/Getty ImagesIranian President Mahmoud Ahmadinejad tours an exhibition on laser technology in Tehran on February 7, 2010

The Obama administration is increasingly anxious about Israeli leaders’ provocative public comments on Iran’s nuclear program but does not have hard proof that it will strike Iran in the next few months, U.S. and European officials said.

The U.S. uncertainty and lack of information about Israel’s plans on Iran were behind an alarming assessment of the situation reportedly voiced by Panetta, the officials said.

Three U.S. officials who follow the issue said their understanding was that the United States did not have concrete intelligence suggesting an attack by Israel on Iran in that time frame was likely or actively being prepared.

The current U.S. assessment is that for months Israel had been making contingency plans and tentative preparations both for such an operation and for possible Iranian retaliation, two of the officials said.

Nonetheless, said the officials, indications were that Israel’s leadership had not made a final decision to attack Iran.

Ken Pollack, a former White House and CIA official with expertise on the Gulf, said the sudden rise in public discussion of an Israeli strike on Iran’s known nuclear sites — including increasingly dire warnings from Israel’s leaders — were misleading.

“If Israel has a good military option, they just take it, they don’t talk about it, they don’t give warnings,” said Pollack, director of the Saban Center for Middle East Policy at the Brookings Institution. “So the fact that they are talking about it, to me, is one tip-off that they don’t have a good military option.

“We should never rule out the possibility of an Israeli strike and the odds have probably increased in recent months as a result of a number of different factors. But … there are a lot of disincentives that have prevented Israel from launching a strike for 10 years,” Pollack said.

VAGUE PANETTA RESPONSE

MARWAN NAAMANI/AFP/Getty ImagesAn oil tanker cruises towards the Strait of Hormuz off the shores of Khasab in Oman on January 15, 2011. Iran threatened to close the Strait of Hormuz in the Gulf if extra sanctions bite, cutting off the transport of 20 percent of the world's oil as United States warned that Iran would cross a "red line," prompting likely military action.

Panetta was vague when asked by journalists to confirm what TheWashington Post had reported.

“Frankly, I’m not going to comment on that,” he told reporters travelling with him in Europe. “David Ignatius, you know, can write what he will but, you know, with regards to what I think and what I view, I consider that to be an area that belongs to me and nobody else.”

When pressed further, Panetta said: “There really isn’t that much to add except that, you know, that they’re considering this and, you know, we have indicated our concerns.”

Asked about the background to Panetta’s reported views, one of the U.S. officials noted that Israeli leaders, including Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak, had been “increasingly vocal” in expressing concern that Israel might be “running out of time” to stop Iran from building a nuclear bomb. The official said that some Israelis have indicated their view that in the next three or four months the need for Israeli action could become critical.

But the view of many career experts inside the U.S. government is that Iran’s nuclear development program, which Tehran insists is for civilian nuclear purposes, is unlikely to pass the point of no return in that time frame.

Earlier this week, U.S. Director of National Intelligence James Clapper testified before Congress and publicly re-stated the long-standing view of U.S. intelligence agencies that Iran’s leaders have not yet decided to build a nuclear weapon.

Many, if not most, Western experts believe it would take Iran at least a year to build a weapon once leaders decided to go ahead.

But some Israel leaders and experts believe that an attack would have to be launched earlier if Iran’s nuclear effort is to be set back seriously. Barak has warned that Iran’s nuclear research could soon pass into what he called a “zone of immunity,” protected from outside disruption.

Barak recently was quoted telling a security conference in Israel, “Later is too late,” one of the U.S. officials noted. The official said that U.S. policymakers had to be concerned about the possibility of an early Israeli attack “given that Barak and Netanyahu seem so determined to do it.”

In January an Iranian nuclear scientist was killed by man who attached a bomb to his car — the fifth such attack in two years. Israel’s military chief said Iran could expect more such incidents.

POLITICAL IMPLICATIONS IN U.S.

REUTERS/President.ir/Handout Iranian President Mahmoud Ahmadinejad walks down the steps of a plane as he arrives in Kerman province, southeast of Iran January 26, 2012. The European Union rather than Iran will lose out under new EU sanctions banning Iranian oil, Ahmadinejad said on Thursday as lawmakers said they might cut supplies to EU countries ahead of a July 1 deadline.

One of the U.S. officials said that while Israel may have the military capability to delay Iran’s nuclear effort for a period of time, to deal the Iranian program a serious and long-term setback would require additional military power, presumably from the United States.

But Panetta’s alleged remarks and other Obama administration’s statements indicate the White House is focused on dissuading Israel from taking action — and distancing itself from an Israel strike if persuasion fails.

A strike on Iran and Iran’s response, including attempts to close the Strait of Hormuz, which is vital for oil shipments, could seriously harm the U.S. economy, jeopardizing President Barack Obama’s chances for re-election. Obama also would likely come under intense domestic pressure to back Israel’s actions.

“The U.S. is not too excited about engaging with Israel or being part of anything at this point,” one official said.

A European defense analyst, who has access to classified all-source intelligence, said that while Iran’s behavior was relatively predictable, the greatest uncertainties facing the U.S. and its allies stemmed from Israel’s stance.

Despite internal power squabbles, the analyst said, Iran has been “quite restrained and limited in its responses.” Recent inflammatory comments by Iranian leaders, such as threats to block the Strait of Hormuz, were relatively low-intensity compared to other threats and physical confrontations in the Gulf of past years.

“Israel is, practically speaking, the wild card in the pack,” the analyst said. “We have no specific information on when or if they will attack but based on their past history and current stance, it is something we do expect at some point.”

WATCHDOGS

Atta Kenare/AFP/Getty ImagesIranians carry the coffin of nuclear scientist Mostafa Ahmadi-Roshan during his funeral after the Friday prayers outside Tehran university on January 13, 2012.

Iran’s apparent reluctance to let UN inspectors visit a military site near Tehran underlines the uphill task they face in getting the Islamic state to address suspicions it may be seeking to develop nuclear weapons, Western diplomats say.

They say the UN nuclear watchdog sought access to the Parchin complex during three days of talks in the Iranian capital, so far without any sign that Iran would agree to it.

More meetings are scheduled for later this month — rare direct dialogue in the long-running international dispute, which has deepened as the West pursues punitive embargos on Iranian oil and Tehran threatens retaliation.

The International Atomic Energy Agency (IAEA) named Parchin in a detailed report in November that lent independent weight to Western fears that Iran is working to develop an atomic bomb, an allegation Iranian officials reject.

The UN agency has not said whether the issue was among those it raised in the January 29-31 discussions in Tehran aimed at shedding light on possible nuclear-linked weapons development work, but diplomats accredited to the IAEA said it was.

The senior IAEA team requested “access to Parchin, which Iran did not provide,” one Western diplomat said.

He and others suggested that Iran had sidestepped the question rather than rejected it outright during the meetings with the IAEA delegation headed by the agency’s global inspections chief, Deputy Director General Herman Nackaerts.

“They asked to see a particular site and they never got an answer,” another envoy said. “The bottom line is: Iran did not engage the agency on the issues the agency wanted to discuss.”

Iranian officials were not immediately available for comment. Foreign Minister Ali Akbar Salehi this week described the Tehran talks as “very good,” without giving details.

Last year’s IAEA report laid bare a trove of intelligence pointing to research activities in Iran relevant for developing the means and technologies needed to assemble nuclear weapons, should it decide to do so.

One key finding was information that Iran had built a large containment chamber at Parchin southeast of Tehran in which to conduct high-explosives tests, which the UN agency said are “strong indicators of possible weapon development.”

Iran says its nuclear program is entirely peaceful and rejects allegations of planned weapons as forged and baseless.

The IAEA said before its Tehran trip late last month that the overall objective was to “resolve all outstanding substantive issues,” referring to its growing concerns of possible military dimensions to Iran’s nuclear program.

“REINFORCED PESSIMISM”

Ebrahim Noroozi / AFP / Getty ImagesIran fired its 200-kilometre-range ground-to-sea missile on the last day of navy war games in the Strait of Hormuz on Jan. 2.

But diplomats said the talks appeared to have made little concrete progress on the issues highlighted by the IAEA’s report, which said Iran appeared to have worked on nuclear weapon design and secret research to that end may continue.

The IAEA delegation had also requested more information about a heavy-water reactor under construction and plans to build new uranium enrichment sites, one envoy said.

“It is of great importance that the IAEA experts will have unfettered access to information, sites, equipment and people who have been involved in the military related activities,” said Olli Heinonen, Nackaerts’ predecessor who is now at Harvard University.

Tehran’s history of hiding sensitive nuclear activity from the IAEA, continued restrictions on agency access and its refusal to suspend uranium enrichment – which can yield fuel for atom bombs – have drawn four rounds of UN sanctions.

The United States and the European Union seized on the IAEA report to ratchet up sanctions aimed at Iran’s oil exports.

The outcome of the IAEA talks with Iran — a second round is planned for February 21-22 — is closely watched in Western capitals and Israel for signs of whether Iran’s leadership may finally be prepared to give ground after a decade of pursuing its nuclear development goals or whether it remains as defiant as ever.

“There was nothing achieved on this visit,” the Western envoy said. “I was never optimistic. This just reinforces my pessimism.”

In a new sign of Iran’s refusal to back down, Supreme Leader Ayatollah Ali Khamenei said Iran would retaliate over Western-backed oil sanctions and any threat of attack, insisting outside pressure would not halt its nuclear work.

Suspicions about activities at the Parchin military complex southeast of Tehran date back at least to 2004 when a prominent nuclear expert said satellite images showed it may be a site for research and testing relevant for nuclear weapons.

In 2005, UN inspectors visited the large site, but not the place where the IAEA now believes the explosives chamber was built.

]]>http://news.nationalpost.com/2012/02/03/iran-will-blink-if-sanctions-hit-rapidly-so-war-probably-wont-be-needed-israeli-minister/feed/12stdLeon PanettaCLICK TO ENLARGENuclearAn oil tanker cruises towards the Strait of Hormuz off the shores of Khasab in Oman on January 15, 2011. Iran threatened to close the Strait of Hormuz in the Gulf if extra sanctions bite, cutting off the transport of 20 percent of the world's oil as United States warned that Iran would cross a "red line," prompting likely military action. Iranian President Mahmoud Ahmadinejad walks down the steps of a plane as he arrives in Kerman province, southeast of Iran January 26, 2012. The European Union rather than Iran will lose out under new EU sanctions banning Iranian oil, Ahmadinejad said on Thursday as lawmakers said they might cut supplies to EU countries ahead of a July 1 deadline.Iranians carry the coffin of nuclear scientist Mostafa Ahmadi-Roshan during his funeral after the Friday prayers outside Tehran university on January 13, 2012. Iran fired its 200-kilometre-range ground-to-sea missile on the last day of navy war games in the Strait of Hormuz on Jan. 2.Ayatollah Ali Khamenei gives fiery speech promising retaliation against U.S. for Iran sanctionshttp://news.nationalpost.com/2012/02/03/ayatollah-ali-khamenei-gives-fiery-speech-promising-retaliation-against-u-s-for-iran-sanctions/
http://news.nationalpost.com/2012/02/03/ayatollah-ali-khamenei-gives-fiery-speech-promising-retaliation-against-u-s-for-iran-sanctions/#commentsFri, 03 Feb 2012 16:11:55 +0000http://news.nationalpost.com/?p=136931

Iran’s supreme leader threatened on Friday to retaliate against the West for sanctions, a day after a U.S. newspaper said defense secretary Leon Panetta believed Israel was likely to bomb Iran within months to stop it building a nuclear bomb.

Ayatollah Ali Khamenei’s defiant televised speech marking the anniversary of the 1979 Iranian revolution was the first time the top authority has spoken publicly about the impact of the new sanctions, which have strangled the Iranian economy since the start of the year.

The long-simmering confrontation between the West and Iran over its nuclear program entered a decisive phase last month. Iran began enriching uranium at a deep underground bunker and the United States and Europe imposed new sanctions to prevent Tehran selling oil, putting its economy in a downward spiral.

Iran holds a parliamentary election in a month – its first since a 2009 presidential vote triggered a failed popular uprising – and its tightly-controlled political system will have to cope with the economic hardship caused by sanctions.

“In response to threats of oil embargo and war, we have our own threats to impose at the right time,” Khamenei told worshippers in his televised speech.

“Sanctions will not have any impact on our determination to continue our nuclear course,” he said.

“Such sanctions will benefit us. They will make us more self-reliant…. We would not achieve military progress if sanctions were not imposed on Iran’s military sector.”

Behind the sanctions looms an underlying threat of war. Panetta said he would not comment on — but did not dispute — a report by Washington Post columnist David Ignatius that Panetta thinks Israel is likely to attack Iran in the next few months.

Ignatius travelled with Panetta to Brussels this week. His column on Thursday was the strongest suggestion yet that Washington policymakers were bracing for an Israeli attack.

“Panetta believes there is a strong likelihood that Israel will strike Iran in April, May or June – before Iran enters what Israelis described as a ‘zone of immunity’ to commence building a nuclear bomb,” columnist David Ignatius wrote.

“Very soon, the Israelis fear, the Iranians will have stored enough enriched uranium in deep underground facilities to make a weapon — and only the United States could then stop them militarily,” Ignatius wrote.

Panetta told reporters: “David Ignatius can write what he will but — with regards to what I think and what I view — I consider that an area that belongs to me and nobody else.”

Asked if he disputed the story, he said: “No … I’m just not commenting.”

Three U.S. national security officials told Reuters on Friday Washington had no specific intelligence that an Israeli attack on Iran was imminent, but they were concerned because of recent public statements by Israeli officials. The U.S. officials also said they believed Israel would not warn Washington in advance if it planned to strike.

Washington, which like Israel has not ruled out an attack on Iran to stop it from developing an atomic bomb, has made clear it believes sanctions should be given a chance to work before a military strike is considered. U.S. officials have repeatedly tried to persuade Israel to hold fire.

Ebrahim Noroozi / AFP / Getty ImagesIran fired its 200-kilometre-range ground-to-sea missile on the last day of navy war games in the Strait of Hormuz on Jan. 2.

“PAINFUL AND CRIPPLING”

Khamenei said any U.S. military strike against Iran would backfire and that the “painful and crippling” Western sanctions would only increase the resilience of Iran.

“Americans say all options are on the table even the option of military strike [against Iran]… Any military strike is ten times more harmful for America. Such threats show that they have no sufficient discourse against Iran’s logic and discourse.”

“Such threats show that America has no way but using force and bloodshed to achieve its goals, which further harms America’s rulers, international and domestic credibility,” he added.

Khamenei said the aim of the sanctions was to punish “the Islamic Republic because of Islam.”

“Such sanctions will benefit us. They will make us more self-reliant … We would not achieve military progress if sanctions were not imposed on Iran’s military sector … More imposed pressures mean more self-reliance for Iran.”

“Sanctions are beneficial also because it makes us more determined not to change our nuclear course … Iran will not change its nuclear course because of sanctions…,”he added.

Israel, widely believed to possess the Middle East’s only nuclear arsenal, views Iran’s uranium enrichment projects as a major threat and has not ruled out the use of military force to prevent Tehran from acquiring nuclear weapons.

The Post said the postponement of a joint U.S.-Israeli military exercise that had been scheduled for this spring may have signaled the prospect of an Israeli attack soon.

Iran has said repeatedly it could close the vital Strait of Hormuz Gulf oil export route if sanctions succeed in preventing it exporting crude, a move Washington said it would not tolerate.

Israel’s Military Intelligence Chief Major-General Aviv Kochavi said on Thursday he estimated that Iran could make four atomic bombs by further enriching uranium it had already stockpiled, and could produce its first bomb within a year of deciding to build one.

Citing figures similar to those from the IAEA, the UN nuclear agency, Kochavi told Israel’s annual Herzliya Conference on strategic affairs: “Iran has accumulated more than 4 tonnes of uranium enriched to a level of 3.5 percent and nearly 100 kilos at an enrichment level of 20 percent.

“This amount of material is already enough for four atomic bombs.”

Israeli Defense Minister Ehud Barak said separately that “if sanctions don’t achieve the desired goal of stopping (Iran’s) military nuclear program, there will be a need to consider taking action.”

A top Chinese newspaper stepped up Beijing’s opposition to a Western push for tighter sanctions against Iran, warning on Friday that tensions over Tehran’s nuclear program are hurting energy markets and could stifle the global economic recovery.

REUTERS/Morteza NikoubazlStudents from various universities in Tehran hold pictures of Iranian scientist Mostafa Ahmadi-Roshan, who was killed in a bomb blast on January 11, and Iran's Supreme Leader Ayatollah Ali Khamenei (L) as they wait for the arrival of the International Atomic Energy Agency (IAEA) delegates at Tehran's Imam Khomeini International Airport (IKIA) January 29, 2012.

GLOBAL ECONOMY

China’s criticism appeared in the People’s Daily, the mouthpiece of the ruling Communist Party. It comes a day after German Chancellor Angela Merkel urged Beijing to use its influence to persuade Iran to give up its nuclear program.

“The global economy is in the midst of a difficult economic recovery and reducing the shocks of uncertainties is the common responsibility of countries all over the world,” the People’s Daily commentary said.

“In the near term, the sudden spike in tensions between the United States and Iran is now posing the greatest uncertainty. This factor is disrupting global energy markets and has cast a shadow over the global economic recovery.”

China, the world’s second-largest crude consumer and the biggest buyer of Iranian oil, has long opposed unilateral sanctions that target Iran’s energy sector and has tried to reduce tensions that could threaten its oil supply.

Escalating tensions between Iran and the West have pushed up Brent crude prices by about 9 percent since mid-December.

On Thursday, at a joint media briefing after what Germany’s Merkel described as “long discussions” about Iran, Chinese Premier Wen Jiabao appeared to reject the pressure to do more.

He said Beijing objected to Western nations politicizing the “normal commercial relationship” it has with the Islamic Republic, echoing language that China has used before.

Merkel, who is in China on a three-day visit, said she hoped the UN Security Council could pass a unanimous resolution on the Iran issue.

Muhannad Fala'ah/Getty ImagesIraqi Prime Minister Nouri al-Maliki.

IRAQ WAIVERS

Iraq could seek a waiver from the United States on sanctions on Iran because of its high trade with the neighboring country and to protect its foreign reserves from penalties, an Iraqi government spokesman said on Friday.

The U.S. government in December signed a law imposing sanctions on financial institutions dealing with Iran’s central bank, the main channel for its oil revenues and the European Union has also announced a ban on Iranian oil shipments.

Iraq’s Shi’ite-led government has moved closer to Tehran since the 2003 invasion and Iran is now Iraq’s main trade partner after neighboring Turkey.

Tehran said last year it planned to boost bilateral trade to $10 billion in 2011 from $6 billion in 2010.

“Iraq is considering a waiver from the United States in order not to violate any sanctions,” Iraq government spokesman Ali al-Dabbagh said. “We are exposed to any penalties on countries not following U.S. sanctions.”

Japan is also weighing a possible waiver on the new U.S. sanctions and is seeking ways to reduce its reliance on Iranian crude shipments.

DELICATE ISSUE

Under the U.S. law, the White House can exempt institutions in a country that has significantly reduced its dealings with Iran and in situations where a waiver is in U.S. national security interest or necessary for energy market stability.

Iraq has $60-billion in foreign reserves, most of which are generated by its oil revenues. Countries and companies trading with Iran risk being barred from the U.S. financial system under the terms of the sanctions.

The U.S. government has so far not been officially contacted on the waiver by Iraq, a U.S. embassy spokesman said.

The Iranian sanctions are a delicate issue for Baghdad, which has strong political ties with neighboring Iran and Syria, which is also facing international penalties.

The Islamic Republic now provides Iraq with fuel and electricity for its domestic market as well as imports of food, construction materials, petrochemicals and medical equipment. Iran has invested heavily in factories and power plants as part of Iraq’s post-war reconstruction.

Baghdad has rejected Arab League calls for sanctions on Syria, it says in part because of Iraq’s own experience with sanctions during the Saddam Hussein era.

Washington and Europe have moved to tighten restrictions on Iran in a bid to force Tehran to curb its nuclear program, prompting Iran to respond with threats to close the Strait of Hormuz shipping line if sanctions stop it exporting crude.

JOURNALIST RELATIVE DETENTION

The Iranian government has intimidated and arrested relatives and friends of Persian-language journalists working abroad in a bid to silence them, Human Rights Watch said Friday.

The rights group highlighted the case of a BBC reporter Iranian authorities “arbitrarily detained and held as a hostage” for almost two weeks as Iran prepares to hold parliamentary elections on March 2.

HRW said security forces raided the home of a BBC Persian service employee’s relative in Tehran in mid-January, searched and confiscated their belongings, and took them to Evin prison.

Within hours, a man claiming to be the relative’s interrogator contacted the BBC employee in London, offering to free the family member in return for information about the BBC, the rights group said.

HRW said the detainee was released on bail several days ago.

“Detaining a BBC reporter’s relative seems to be part of a wider campaign to harass Iranian journalists by putting pressure on them and their families,” said Sarah Leah Whitson, HRW’s Middle East director.

“It suggests that authorities detained the relative to silence the reporter and the BBC. It also sends a message that the government’s long arm of repression can extend well beyond borders.”

A BBC staff member who spoke to HRW expressed concern about the targeting of family members of journalists.

He said he and his colleagues had been exposed “to almost daily insults and personal attacks on various pro-government websites and blogs inside Iran”, but added: “This is really a red line for us, and we can’t stay silent.”

In October, the BBC accused Iranian authorities of harassing relatives of its London-based Iranian employees.

Iran has frequently accused the BBC of fuelling the unrest that broke out following the disputed re-election of President Mahmoud Ahmadinejad in 2009.

SATELLITE LAUNCH

Iran on Friday launched an observation satellite into orbit above Earth, its third since 2009, the official IRNA news agency reported.

“The Navid satellite was launched successfully…. It will be placed into an orbit (at an altitude) between 250 and 370 kilometres,” IRNA quoted the head of Iran’s Space Organisation, Hamid Fazeli, as saying.

The launch comes as Iran is marking the anniversary of its 1979 Islamic revolution — and as tensions are heating up over Iran’s nuclear program.

The 50-kilogram (110-pound) satellite is meant to stay in orbit for 18 months, sending back images to Iran as it completes a revolution of Earth every 90 minutes. It was unveiled two years ago and its launch had long been expected.

President Mahmoud Ahmadinejad led the launch ceremony, media said.

“It’s the beginning of an immense labour… which holds the promise of friendship for all mankind,” Ahmadinejad was quoted as saying.

Iran’s defence minister, Ahmad Vahidi, said the Navid satellite would beam its images to several ground stations across the country, according to media.

“The telemetric and command stations give and receive data and control the satellite,” Vahidi said.

It was the third domestically made satellite Iran has put above the planet using its Safir rockets. The other two observation platforms, launched in February 2009 and July 2011, stayed in orbit for two to three months.

Iran’s space program deeply unsettles Western nations, which fear it could be used to develop ballistic missiles capable of carrying nuclear warheads they suspect are being developed in secret.

There is increasing speculation that Israel is considering air strikes on Iranian nuclear facilities — an action that could possibly spark a broader conflict drawing in the United States.

Tehran, which insists its nuclear programme is exclusively peaceful, says its space ambitions include launching seven other satellites in coming years — and putting an Iranian astronaut into orbit by 2020.

An attempt to put a monkey into a 20-minute orbital flight mid-2011 ended in failure.

]]>http://news.nationalpost.com/2012/02/03/ayatollah-ali-khamenei-gives-fiery-speech-promising-retaliation-against-u-s-for-iran-sanctions/feed/11stdAyatollah Ali KhameneiIran fired its 200-kilometre-range ground-to-sea missile on the last day of navy war games in the Strait of Hormuz on Jan. 2.Students from various universities in Tehran hold pictures of Iranian scientist Mostafa Ahmadi-Roshan, who was killed in a bomb blast on January 11, and Iran's Supreme Leader Ayatollah Ali Khamenei (L) as they wait for the arrival of the International Atomic Energy Agency (IAEA) delegates at Tehran's Imam Khomeini International Airport (IKIA) January 29, 2012. Iraqi Prime Minister Nouri al-Maliki.J.L. Granatstein: Canadian interests, not UN posturing, should govern actions on Iranhttp://news.nationalpost.com/2012/02/03/j-l-granatstein-canadian-interests-not-un-posturing-should-govern-actions-on-iran/
http://news.nationalpost.com/2012/02/03/j-l-granatstein-canadian-interests-not-un-posturing-should-govern-actions-on-iran/#commentsFri, 03 Feb 2012 14:15:35 +0000http://fullcomment.nationalpost.com/?p=66243

Let’s consider a not-so-hypothetical scenario: suppose that the nation of Bafflegab, awash with oil and located at a strategic choke point on the globe, is rapidly developing nuclear weapons while denying that it is doing so.

“We are just enriching uranium to produce electricity and for medical research,” says the president.

At the same time, Bafflegab’s leaders support anti-Western and anti-Israel terrorist groups, prop up dictatorships in the Middle East, Asia, and Latin America, and threaten Israel and the West with military preparations and increasingly hostile rhetoric.

The Western response is to try to negotiate an end to nuclear weapons development. These efforts fail, and a slow ratcheting-up of economic sanctions begins, accompanied by the beginnings of military readiness. After one violent terrorist incident, after a Western naval officer lets loose an anti-ship missile and sinks a small Bafflegab speedboat, general hostilities seem poised to begin. The issue goes to the United Nations Security Council where Russia, backed by China, an eager purchaser of Bafflegab oil, vetoes any action. The General Assembly does nothing. Following agonizing discussions, the Western nations and Israel go to war. The President of the United States declares that it is in the vital interests of his nation to act, the UN veto notwithstanding.

What does Canada do? Our present political leaders — most recently the Minister of National Defence, Peter MacKay, and the Parliamentary Secretary for Foreign Affairs, Deepak Obhrai — have said that Canada requires a UN Security Council resolution before it will intervene in Syria and, by implication, everywhere. Of course, this rationale did not stop Canada from sending its CF-18 aircraft to bomb Serbian targets during the Kosovo intervention in 1999, the sole authority then being decisions made by NATO. On the other hand, Prime Minister Jean Chrétien in 2003 claimed that UN approval was essential — and lacking — at the beginning of the Iraq War when Canada remained on the sidelines. (Note that some 50 nations supported the U.S. in the Iraq War, notwithstanding the absence of a UN resolution.) Now the Chrétien “doctrine” seems to be accepted as gospel by all the parties in Parliament. Thus Canada’s friends ready themselves to fight Bafflegab, while Ottawa sits on its hands, all action checked by Russian and Chinese vetoes.

Does this make any sense? To the Canadian true believers in the United Nations, every military response unauthorized by the UN is illegal. To pragmatists, the UN is a weak reed, its potential as a future world government hampered by the clash of Great Power interests.

The pragmatists are leery of a Security Council that gives China and Russia the right and opportunity to paralyze strong action whenever their national interests direct. The Chinese and Russians are not acting out of a humane concern for the people of Bafflegab, of course. They cast their vetoes to protect and advance their oil supplies and their national interests. They have every right to do so.

But so do we. The test for every Canadian response should be the same: Will action protect or advance our national interests? Bafflegab’s oil may not be shipped to Canada in any quantity, but its sponsored terrorism is a threat to Canada and Canadian citizens around the world. Its control of a vital waterway can interfere with the global trade on which our importers and exporters depend. When Bafflegab gets nuclear weapons, and it will, the dangers will only multiply. And our allies, their vital interests in peace, security, and commerce also under threat, believe that military action is necessary. Canada’s national interests in such circumstances suggest that we follow the Kosovo example rather than the Chrétien “doctrine.”

Very simply, no nation should ever consent to having its hands tied by a supranational organization when its vital interests are threatened. The inherent right to self-defence and the protection of vital national interests must override a UN Security Council veto. The peace and security of the world is just such a Canadian vital interest, as is the danger posed by the spread of nuclear weapons to even more unstable, messianic nations. Our interests must not be held hostage to a UN Security Council resolution.

Somehow without truly understanding how this happened, the Canadian government slipped into the position that UN authorization is a requirement for action. No one wants Canada to go tearing off looking for war in every corner of the map. But no one should think that only a rarely united Security Council must determine if Ottawa can act with its friends against a threat to peace. We need public debate on this point now, before the Bafflegab situation, before the Iranian situation, blows up in our face.

]]>http://news.nationalpost.com/2012/02/03/j-l-granatstein-canadian-interests-not-un-posturing-should-govern-actions-on-iran/feed/0stdIran may or may not be building nuclear weapon, but they’re keeping their options open: U.S. intelligence chiefhttp://news.nationalpost.com/2012/01/31/iran-may-or-may-not-be-building-nuclear-weapon-but-theyre-keeping-their-options-open-u-s-spy-chief/
http://news.nationalpost.com/2012/01/31/iran-may-or-may-not-be-building-nuclear-weapon-but-theyre-keeping-their-options-open-u-s-spy-chief/#commentsTue, 31 Jan 2012 16:40:45 +0000http://news.nationalpost.com/?p=135716

By Tabassum Zakaria

WASHINGTON — Iran is keeping the option open to develop a nuclear weapon but U.S. intelligence agencies do not know whether it will eventually decided to build one, the U.S. intelligence chief said on Tuesday.

New U.S. sanctions imposed over Iran’s nuclear program were likely to have a greater impact than previous ones, but were not expected to lead to the downfall of Tehran’s leadership, Director of National Intelligence James Clapper said in prepared testimony on the annual worldwide threat assessment for the Senate intelligence committee.

KAREN BLEIER/AFP/Getty Images FilesJames Clapper

“We assess Iran is keeping open the option to develop nuclear weapons, in part by developing various nuclear capabilities that better position it to produce such weapons, should it choose to do so,” Clapper said. “We do not know, however, if Iran will eventually decide to build nuclear weapons.”

Iran is expanding its uranium enrichment capabilities, which can be used for either civil or weapons purposes, he said.

“Iran’s technical advancement, particularly in uranium enrichment, strengthens our assessment that Iran has the scientific, technical, and industrial capacity to eventually produce nuclear weapons, making the central issue its political will to do so,” Clapper said.

“These advancements contribute to our judgment that Iran is technically capable of producing enough highly enriched uranium for a weapon, if it so chooses,” he said.

President Barack Obama signed into law December 31 sanctions on Iran’s central bank. The new U.S. sanctions will have a greater impact on Iran because the Central Bank of Iran handles a large volume of foreign bank transactions and receives the revenue for the roughly 70% of Iranian oil sold by the National Iranian Oil Company, Clapper said.

“Despite this, Iran’s economic difficulties probably will not jeopardize the regime, absent a sudden and sustained fall in oil prices or a sudden domestic crisis that disrupts oil exports,” he said.

Iran has sought to “exploit the Arab Spring but has reaped limited benefits, thus far,” the testimony said. Its biggest regional concern is Syria where a change in leadership would be a major strategic loss for Tehran.

Nearly a year into the unrest, the situation in Syria is unlikely to be resolved quickly, Clapper said.

“Both the regime and the opposition are determined to prevail, and neither side appears willing to compromise on the key issue of President Bashar al-Assad remaining in power.”

Iran’s alleged plot to assassinate the Saudi ambassador to the United States suggests the country’s leaders are now more willing to launch attacks on American soil, Clapper said Tuesday.

Last year’s suspected conspiracy “shows that some Iranian officials — including Supreme Leader Ali Khamenei — have changed their calculus and are now more willing to conduct an attack in the United States in response to real or perceived U.S. actions that threaten the regime,” Clapper told the senate hearing.

The United States was also concerned about possible Iranian attacks against U.S. or allied targets abroad, he said.

But Iran’s actions would depend on how Tehran’s leaders assess the consequences of the suspected Saudi plot and perceptions of Washington’s stance, he said.

“Iran’s willingness to sponsor future attacks in the United States or against our interests abroad probably will be shaped by Tehran’s evaluation of the costs it bears for the plot against [Saudi Arabia’s] ambassador as well as Iranian leaders’ perceptions of US threats against the regime,” he said.

Clapper did not elaborate beyond those brief remarks and most of his comments on Iran focused on Tehran’s disputed nuclear program, portraying the Islamic republic’s leaders as still open to diplomatic influence.

In October the United States alleged that Iranian officials used an Iranian-American car salesman to hire a Mexican drug gang in a plot to blow up the Saudi envoy.

The United States claimed it traced the plot back to the Quds Force, a special operations unit of Iran’s Revolutionary Guards, though Iran has repeatedly denied any involvement in the plot.

CHINA CONCERNED

REUTERS/Morteza NikoubazlStudents from various universities in Tehran hold pictures of Iranian scientist Mostafa Ahmadi-Roshan, who was killed in a bomb blast on January 11, and Iran's Supreme Leader Ayatollah Ali Khamenei (L) as they wait for the arrival of the International Atomic Energy Agency (IAEA) delegates at Tehran's Imam Khomeini International Airport (IKIA) January 29, 2012.

The Arab Spring uprisings fueled concern among Chinese leaders that similar unrest could undermine their rule, prompting Beijing to launch its harshest crackdown on dissent in at least a decade, Clapper said.

At the same time, worries about the global economy helped heighten Beijing’s resistance to external pressure and suspicion of U.S. intentions, he said.

China continued a policy of permitting modest appreciation of the renminbi, “although it remains substantially undervalued,” the testimony said.

In North Korea, it is still early to assess the extent of the new leader, Kim Jong-un’s authority, Clapper said. Senior North Korean leaders will probably remain cohesive at least in the near term to prevent instability and protect their interests, the testimony said.

U.S. intelligence agencies judge that North Korea tested two nuclear devices, in October 2006 and May 2009, which “strengthen our assessment that North Korea has produced nuclear weapons,” Clapper said.

“The Intelligence Community assesses Pyongyang views its nuclear capabilities as intended for deterrence, international prestige, and coercive diplomacy. We judge that North Korea would consider using nuclear weapons only under narrow circumstances,” he said.

SPYING THREAT

ATTA KENARE/AFP/Getty ImagesIranians sit next to miniature toy models of the US drone RQ-170 with a slogan quoted by the Islamic Republic's late founder Ayatollah Ruhollah Khomeini reading in Farsi, "we will step on the United states." The toys are a propaganda tool from Iran after the US RQ-170 Sentinel high-altitude reconnaissance drone was captured in Iran on December 4, 2011.

Espionage by China, Russia, and Iran will remain top threats to the United States in coming years, Clapper said. Russia and China are aggressive and successful in economic espionage against the United States, and “Iran’s intelligence operations against the United States, including cyber capabilities, have dramatically increased in recent years in depth and complexity.”

Foreign intelligence services have targeted the unclassified and classified computer networks of U.S. government agencies, businesses, and universities. “We assess that many intrusions into U.S. networks are not being detected,” he said.

The next two to three years will be a “critical transition phase” for the terrorism threat facing the United States, particularly from al Qaeda and like-minded groups, Clapper said.

Al Qaeda’s leadership is expected to become more decentralized, with the core group formerly led by Osama bin Laden diminishing in operational importance. Counterterrorism efforts to keep pressure on the group could lead to fragmentation of the movement within a few years, he said.

Core al Qaeda is in decline and with the death of Osama bin Laden, “the global jihadist movement lost its most iconic and inspirational leader,” Clapper said. Most members find al Qaeda’s new leader, Ayman al-Zawahri, less compelling and “will not offer him the deference they gave bin Laden.”

]]>http://news.nationalpost.com/2012/01/31/iran-may-or-may-not-be-building-nuclear-weapon-but-theyre-keeping-their-options-open-u-s-spy-chief/feed/5stdMahmoud AhmadinejadJames ClapperStudents from various universities in Tehran hold pictures of Iranian scientist Mostafa Ahmadi-Roshan, who was killed in a bomb blast on January 11, and Iran's Supreme Leader Ayatollah Ali Khamenei (L) as they wait for the arrival of the International Atomic Energy Agency (IAEA) delegates at Tehran's Imam Khomeini International Airport (IKIA) January 29, 2012. Spy PlaneIAEA nuclear inspector visit to Iran does little to defuse international tensionshttp://news.nationalpost.com/2012/01/31/iaea-nuclear-inspector-visit-to-iran-does-little-to-defuse-international-tensions/
http://news.nationalpost.com/2012/01/31/iaea-nuclear-inspector-visit-to-iran-does-little-to-defuse-international-tensions/#commentsTue, 31 Jan 2012 16:15:23 +0000http://news.nationalpost.com/?p=135706

By Marc Burleigh

TEHRAN — Officials from the IAEA, the UN nuclear watchdog, were scheduled on Tuesday to wrap up a three-day visit to Iran seen as a chance to defuse an intensifying international showdown over Tehran’s atomic activities.

But even as the high-stakes mission wound down, US lawmakers signalled they intended to keep up the pressure on the Islamic republic by unveiling plans for yet more economic sanctions, on top of those already infuriating Iran.

The visit came amid a building confrontation between Iran and the West, and speculation that Israel is planning military strikes on Iranian nuclear sites.

Iran’s foreign minister, Ali Akbar Salehi, said on Monday his country was prepared to host the International Atomic Energy Agency officials for longer, “if they want” to extend their mission.

It was not known if the offer was made officially to the IAEA team, whose visit was taking place entirely out of public view.

The IAEA has kept silent about which Iranian officials the six-person team — led by chief inspector Herman Nackaerts — was talking with or if it was inspecting any suspect nuclear sites, and media in Tehran well being kept well away.

The UN agency has said the team was to focus on suspicions set out in a November 2011 report it issued strongly suggesting Iran was researching a nuclear weapon.

Iran has called that report baseless and maintains its nuclear programme is peaceful.

Its response to recent, severe Western economic sanctions against its finance and all-important oil sectors has been to defiantly ramp up its nuclear activities.

It has started uranium enrichment at a new fortified bunker in Fordo, near its holy city of Qom, and announced that a 20-percent enriched uranium fuel plate would be inserted into its Tehran research reactor within weeks.

At the same time, though, it has vowed to keep up cooperation with the IAEA.

It has also voiced willingness to resume talks with world powers over its nuclear programme that collapsed a year ago, although it has yet to make any formal step in that direction.

Tehran’s position, repeated by Salehi, is to call on the European Union and the United States to “replace their policy of sanctions with interaction” with the Islamic republic.

But key US lawmakers on Monday said a senate banking commission would soon vote a text to punish Iran further with more economic and political sanctions.

The legislation “sends a clear signal through strong measures that Iran must abandon its nuclear weapons program and its designs for the spread of international terror,” said the top Republican senator on the panel, Richard Shelby.

The bill targets firms that have anything to do with helping Iran mine, produce or transport uranium anywhere in the world.

It also requires US-listed companies to disclose if they or their affiliates could have run afoul of US sanctions on Iran by investing in energy investments, or through the sale of communications monitoring or surveillance technology.

The bill would additionally deny US visas to Iranian students wanting to study in energy-related fields if it is deemed they plan to return to work in Iran’s energy sector or nuclear programme.

And it would tighten sanctions on Iran’s elite Revolutionary Guards, including targeting “anyone who materially assists” the Guards.

One of Iran’s seemingly endless supply of semi-hysterical government leaders made a threat the other day about the price of oil.

The European Union (EU) embargo on oil imports from Iran may push world oil prices to $150 per barrel, the head of Iran’s state oil company has said.
“It seems that we will witness prices from $120 to $150 in the future,” Ahmad Qalehbani, head of the National Iranian Oil Company, said in an interview with IRNA news agency Sunday.

I assume Mr. Qalehbani intended this to sow terror in the hearts of consumers across the western world. And maybe it should, because that’s generally what’s happened in the past when similar threats were made. But all I could think when I read it was, “so what?”

So what, because how long have oil-rich Arab states been making these threats? I was around for the big oil shock in the 1970s, which really was a shock, and forced immense changes in the way westerners went about their lives. But since then the price of oil has risen and plunged, risen and plunged, to the point that few people ever think of oil and stability in the same thought bubble anyway.

In 1972 the annual average price was $3.60, or $21.52 in today’s money, allowing for inflation. In 1980 it was $37.42, or $102.61 in today’s money. It fell back as low as to $11.91 ($16.50) before starting 12 years of almost uninterrupted growth, to about $87.04. (Remember, these are annual averages, so there have been peaks and valleys well above and below those figures).

There is always a great outcry when the price goes too high, then it falls again and we all forget it happened, and go back to buying SUVs. Since that first great shock, the uncertainty has been so constant that it’s become the norm. Anyone who buys a car without calculating where gas prices may go over the life of the vehicle is under-utilizing their brain cells. Plenty of people can be found spending $100 every time the coast into a gas station, and shrugging it off. It may be that, from years of practice, we’ve developed the ability to adapt to a far greater degree than the crazy people in Tehran appreciate.

It is also worth pointing out that, for all the increase in oil prices over the years, the vehicles people buy are as big as they’ve ever been, and economies seem to chug along. The U.S. auto business didn’t come close to collapse a few years ago because of oil prices, but through years of inept management and poor products. The economic downturn that started three years ago had nothing to do with oil and everything to do with stupidity in government and blind greed across two continents.

So the Iranians can threaten all they want. I suspect if they barricade the Strait of Hormuz and shut off oil exports, there would be far more damage to the decrepit, tottering, unpopular regime in Tehran than there would be to the rest of us. The impact on the West might be significant, but we’d manage. The mullahs, cut off from their main source of income, might not.

TEHRAN — Iran sent conflicting signals in a dispute with the West over its nuclear ambitions, vowing to stop oil exports soon to “some” countries but postponing a parliamentary debate on a proposed halt to crude sales to the European Union.

The Islamic Republic declared itself optimistic about a visit by UN nuclear experts that began Sunday but also warned the inspectors to be “professional” or see Tehran reducing cooperation with the world body on atomic matters.

Lawmakers have raised the possibility of turning the tables on the EU which will implement its own embargo on Iranian oil by July as it tightens sanctions on Tehran over the nuclear program.

But India, the world’s fourth-largest oil consumer, said it would not take steps to cut petroleum imports from Iran despite U.S. and European sanctions against Tehran.

The International Atomic Energy Agency (IAEA) inspection delegation will try to advance efforts to resolve a row about the nuclear work which Iran says is purely civilian but the West suspects is aimed at seeking a nuclear weapon.

Tension with the West rose this month when Washington and the EU imposed the toughest sanctions yet in a drive to force Tehran to provide more information on its nuclear program. The measures take direct aim at the ability of OPEC’s second biggest Oil exporter to sell its crude.

In a remark suggesting Iran would fight sanctions with sanctions, Iran’s oil minister said the Islamic state would soon stop exporting crude to “some” countries.

Rostam Qasemi did not identify the countries but was speaking less than a week after the EU’s 27 member states agreed to stop importing crude from Iran from July 1.

“Soon we will cut exporting oil to some countries,” the state news agency IRNA quoted Qasemi as saying.

India, a major customer for Iranian crude, made clear it would not join the wider international efforts to put pressure on Tehran by cutting oil purchases.

“It is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them,” Finance Minister Pranab Mukherjee told reporters on a visit to the Unites States.

The United States wants buyers in Asia, Iran’s biggest oil market, to cut imports to put further pressure on Tehran.

Richard Johnson/National Post graphicsCLICK TO ENLARGE

DISCUSSION POSTPONED

Iranian lawmakers had been due to debate a bill Sunday that could have cut off oil supplies to the EU in days, in a move calculated to hit ailing European economies before the EU-wide ban on took effect.

But Iranian MPs postponed discussing the measure.

“No such draft bill has yet been drawn up and nothing has been submitted to the parliament. What exists is a notion by the deputies which is being seriously pursued to bring it to a conclusive end,” Emad Hosseini, spokesman for parliament’s Energy Committee, told Mehr news agency.

Iranian officials say sanctions have had no impact on the country. “Iranian oil has its own market, even if we cut our exports to Europe,” Oil Minister Qasemi said.

Another lawmaker said the bill would oblige the government to cut Iran’s oil supplies to the EU for five to 15 years, the semi-official Fars news agency reported.

By turning the sanctions back on the EU, lawmakers hope to deny the bloc a six-month window it had planned to give those of its members most dependent on Iranian oil — including some of the most economically fragile in southern Europe — to adapt.

NUCLEAR WATCHDOG

Before departing from Vienna, IAEA Deputy Director General Herman Nackaerts said he hoped Iran would tackle the watchdog’s concerns “regarding the possible military dimensions of Iran’s nuclear program.”

Mehr quoted Foreign Minister Ali Akbar Salehi as saying during a trip to Ethiopia: “We are very optimistic about the outcome of the IAEA delegation’s visit to Iran … Their questions will be answered during this visit.”

“We have nothing to hide and Iran has no clandestine [nuclear] activities.”

Striking a sterner tone, Iran’s parliament speaker, Ali Larijani, warned the IAEA team to carry out a “logical, professional and technical” job or suffer the consequences.

“This visit is a test for the IAEA. The route for further cooperation will be open if the team carries out its duties professionally,” said Larijani, state media reported.

“Otherwise, if the IAEA turns into a tool [for major powers to pressure Iran], then Iran will have no choice but to consider a new framework in its ties with the agency.”

Iran’s parliament has approved bills in the past to oblige the government to review its level of cooperation with the IAEA. However, Iran’s top officials have always underlined the importance of preserving ties with the watchdog body.

The head of the state-run National Iranian Oil Company (NIOC) said late Saturday that the export embargo would hit European refiners, such as Italy’s Eni, that are owed oil from Iran as part of long-standing buy-back contracts under which they take payment for past oilfield projects in crude.

The EU accounted for 25% of Iranian crude oil sales in the third quarter of 2011. However, analysts say the global oil market will not be overly disrupted if parliament votes for the bill that would turn off the oil tap for Europe.

Potentially more disruptive to the world oil market and global security is the risk of Iran’s standoff with the West escalating into military conflict.

Iran has repeatedly said it could close the vital Strait of Hormuz shipping lane if sanctions succeed in preventing it from exporting crude, a move Washington said it would not tolerate.

]]>http://news.nationalpost.com/2012/01/30/iran-vows-to-stop-some-oil-exports-as-nuclear-watchdog-arrives/feed/1stdStudents from various universities in Tehran hold pictures of Iranian scientist Mostafa Ahmadi-Roshan, who was killed in a bomb blast on January 11, and Iran's Supreme Leader Ayatollah Ali Khamenei (L) as they wait for the arrival of the International Atomic Energy Agency (IAEA) delegates at Tehran's Imam Khomeini International Airport (IKIA) January 29, 2012.CLICK TO ENLARGE